Buoyed by U.S. and Canadian demand for replacement machines and increased yields from its installed base, International Game Technology’s global gaming revenue grew 21% year on year in the second quarter of 2022.
Due to a $150 million pretax nonoperating expense related to social-gaming litigation, IGT posted a second-quarter loss. Nevertheless, the company’s adjusted earnings, which exclude one-time costs, rose from a year earlier, even as revenue fell.
In a statement Tuesday, London-based IGT said its net loss was $4 million, or 2 cents per share, for the three months ended June 30. However, adjusted earnings were 57 cents per share, up from 32 cents per share a year earlier and beyond the 33-cents-per-share average forecast of analysts surveyed by Seeking Alpha.
The earnings news sent IGT shares up 9.67% Tuesday. The share price climbed $1.81 to close at $20.52 on the New York Stock Exchange, then climbed further after hours. The post-close share price rose 18 cents, or 0.88%, to settle at $20.70.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that also excludes one-time costs, fell 8.1% to $409 million from $442 million.
Revenue fell 1.9% to $1.021 billion from $1.041 billion and missed the $1.031 billion forecast of Seeking Alpha-polled analysts.
Global lottery revenue fell 10.7% to $648 million from $725 million. The year-earlier figure included $70 million in benefits from the closure of Italy gambling halls.
Global gaming revenue rose 21% to $330 million, driven by the previously mentioned U.S. and Canada replacement-unit demand (up 8% from the 2019 pre-COVID second quarter) and higher average selling prices.
“We could have shipped even more units if we weren’t constrained by supply-chain challenges,” IGT Chief Executive Officer Vince Sadusky told analysts and journalists in a conference call. “IGT has steadily gained ship share in North America over the last three-plus years, reaching 27% in (the first quarter), which is the latest data available.”
IGT’s second-quarter digital and betting revenue was $43 million, in line with the previous year; gains from U.S. casino growth were offset by softness in other markets.
During the quarter, IGT closed its $164 million deal for gaming-content company iSoftBet. IGT said the deal expanded the company’s content library and gave it an aggregation platform for distributing third-party games.
In July, IGT’s IGT Global Solutions Corp. subsidiary agreed to deliver online lottery content to the Michigan Lottery for an undisclosed price. Michigan joins Georgia, Kentucky, and Rhode Island as states using IGT’s online lottery content.
IGT said it expects third-quarter revenue of $1 billion to $1.1 billion and operating income margin of 18% to 20%.
Follow Matthew Crowley on Twitter @copyjockey.
