Vegas Inc. coverage
Casino supplier Global Cash Access Holdings Inc. of Las Vegas on Tuesday said its fourth-quarter profit improved thanks to lower costs and its acquisition of a competitor.
Global Cash serves about 1,050 casinos around the world.
It has casino ATM machines, other cash-access services such as check verification and warranty services, and operates a casino credit bureau.
The company said fourth-quarter revenue was flat at $137.7 million vs. $137.8 million in the year-earlier quarter.
The 2011 revenue number was boosted by the acquisition of MCA Processing LLC of Las Vegas in November.
The company earned $4.5 million during the quarter, an improvement from the loss of $269,000 in the fourth quarter of 2010.
Cash earnings per share from continuing operations were 17 cents in the 2011 quarter vs. 9 cents in the year-ago quarter.
Global Cash attributed the year-to-year improvement to the MCA Processing deal and to lower costs.
The lower costs include expense reductions related to the federal Durbin Amendment, which was enacted in October.
The amendment slashed interchange fees charged to merchants by Visa and MasterCard for processing debit transactions.
The change was expected to boost GCA’s gross profit by about 1 percent.
GCA, however, reiterated during a conference call with analysts on Tuesday that the financial services and payments industries may boost other fees to offset the “significant impact” of the Durbin Amendment on debit card fees.
The MCA acquisition is expected to boost revenue for GCA on an annual basis by about $50 million, the company told analysts.
The purchase of MCA enabled GCA to reacquire the important Caesars Entertainment Corp. contract it had lost in 2010.
“With the stabilization of our base business and the portfolio of contracts we acquired through the MCA acquisition, GCA is well positioned as we head into 2012,” CEO Scott Betts said in a statement.
The company said its 2012 financial projections assume “a modest improvement in the gaming industry in 2012.”