IGT reports second-quarter results
April 23, 2009
International Game Technology (NYSE: IGT) reported financial results for the second quarter ended March 31, 2009.
Net income for the quarter was $38.3 million or $0.13 per diluted share compared to $68.4 million or $0.22 per diluted share in the same quarter last year. For the six month period ended March 31, 2009, net income was $104.0 million or $0.35 per diluted share compared to $182.1 million or $0.57 per diluted share in the same period last year. Both the current and prior year three and six month periods were unfavorably impacted by a number of significant items.
"Our second quarter saw continued difficult economic conditions worldwide impacting our financial results, but in a number of jurisdictions we are beginning to see stability in play levels," said CEO Patti Hart. "While the environment has been challenging, the success of our innovative new products and business efficiency initiatives give us confidence in our future prospects. In my first month as CEO, I have seen the determination of our employees to capitalize on our industry leadership, and I am confident the results of our efforts will allow IGT to emerge a stronger company once we experience a period of sustained economic stabilization."
Gaming operations quarterly revenues and gross profit declined 14% and 6%, respectively, over the prior year quarter. Declines were the result of lower play levels as well as growth in the mix of stand alone and lease operations games in our installed base. Gross margin was 59% in the quarter compared to 54% in the prior year quarter. The prior year margin was negatively impacted by additional jackpot expense associated with a sharp decline in interest rates and charges for technological obsolescence during that quarter.
IGT’s installed base of recurring revenue games increased to 61,300 units, up 1,700 units or 3% from the prior year and up 400 units from the previous sequential quarter. The increase over the prior year was driven by growth in international placements partially offset by a reduction in domestic CDS/Class II and Class III markets.
Product sales revenues and gross profit in the second quarter declined 22% and 31%, respectively, while units shipped worldwide increased 4% over the prior year period. On a regional basis for the quarter, North America revenues decreased 14% driven by a decline in replacement sales partially offset by increased sales of new/expansion units. International revenues declined 35% for the quarter as a result of a less favorable geographic mix of sales, with fewer shipments into casino markets partially offset by increased shipments into Japan and the UK. Total consolidated gross margin on product sales for the quarter was 48% compared to 55% in the prior year quarter, primarily due to a greater proportion of lower margin sales in Japan and the UK and lower levels of non-machines revenues.
See IGT’s full 2Q statement