Fourth-quarter adjusted earnings and revenue top forecasts for IGT

February 28, 2023 9:07 PM
Photo: CDC Gaming Reports/IGT Booth G2E 2021
  • Matthew Crowley, CDC Gaming Reports
February 28, 2023 9:07 PM
  • Matthew Crowley, CDC Gaming Reports
  • Canada
  • United States

Surging global gaming revenue and strong gaming product sales in the U.S. and Canada pushed International Game Technology’s business forward in the fourth quarter. Adjusted earnings per share and revenue both topped Wall Street forecasts.

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In a statement Tuesday, London-based IGT reported a net loss of $31 million, or 32 cents per share, for the three months ended Dec. 31, reversing year-earlier net income of $55 million, or 9 cents per share. Noncash foreign-exchange losses dampened the most recent results.

Adjusted earnings per share, which exclude non-recurring costs, were 40 cents per share. That topped the 36 cents-per-share consensus estimate of analysts surveyed by Seeking Alpha.

Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that also excludes one-time costs, rose 8.3% to $419 million from $387 million.

Fourth-quarter revenue rose 10% to $1.1 billion from $1 billion and topped the $1.03 billion forecast of Seeking Alpha-polled analysts.

“Our solid profit growth in 2022, in addition to robust cash-flow generation, is a testament to our ability to overcome significant headwinds, most notably from adverse currency-rate movements and significant supply-chain constraints,” Chief Financial Officer Max Chiara said in a conference call with analysts and journalists.

In the fourth quarter, IGT’s global gaming revenue rose 21% to $389 million, buoyed by double-digit-percentage service and product-sales growth. Global shipments rose 29% to about 9,500 units; record U.S. and Canada shipments totaled nearly 7,500 units.

Fourth-quarter PlayDigital revenue rose to a record $65 million year over year, driven higher by internet gaming and bolstered by contributions from content-provider and third-party game aggregator iSoftBet, which IGT acquired in April 2022 for $174 million. The deal more than doubled IGT’s PlayDigital content library to about 225 proprietary games.

Chief Executive Office Vince Sadusky said IGT will introduce several top-performing iSoftBet games in the U.S. and Canada over the next few weeks, although he didn’t name them. He also said IGT will launch Wheel of Fortune Casino, a brand-led online casino, through long-standing relationships with BetMGM and Sony Pictures Television.

Fourth-quarter PlayDigital operating income was a record $17 million; global-lottery operating income was $216 million; and global gaming operating income was $68 million.

Recapping full-year 2022, IGT said global-lottery revenue fell 8% from a year earlier to $2.6 billion, dragged down by lower same-store sales in Italy. Global gaming rose 28% to $1.4 billion, boosted by increased sales of replacement-machine units in the United States and Canada. Full-year PlayDigital operating income rose to a record $50 million.

Also for the full year, IGT said it had record shareholder returns of $276 million: $161 million in dividends to shareholders and $115 million for share repurchases. The company also cut net debt to $5.2 billion from $5.9 billion.

IGT said it expects full-year 2023 revenue of $4.1 billion to $4.3 billion.

IGT shares rose 75 cents, or 2.91%, Tuesday to close at $26.56 on the New York Stock Exchange. The shares slid after hours, sinking 6 cents, or 0.23%, to settle at $26.50.

Also on Tuesday, IGT said it earned four top honors in the fifth-annual EKG Slot Awards in Las Vegas, produced by Eilers & Krejcik Gaming. IGT won in the Most Improved Supplier Premium, Top Performing New Mechanical Reel Cabinet, Top Performing Video Poker Game, and Top Performing Third-Party IP-Branded Game categories.