International Game Technology capped a third quarter during which it extended contracts to supply technology to the California and Kentucky lotteries by posting adjusted earnings and revenue that topped Wall Street forecasts.
In a 6-K filing with the Securities and Exchange Commission on Wednesday, London-based IGT, which produces slot machines and other gambling technology, said its net income was $123 million, or 46 cents per diluted share, for the three months ended Sept. 30, down from $294 million, or $1.30 per diluted share, a year earlier.
During a conference call with analysts and journalists, IGT Chief Financial Officer Massimiliano Chiara said the year-ago third quarter included the gain on the sale of the company’s commercial service business and a class-action case that accused IGT and DoubleDown gaming of breaching Washington state gambling laws and consumer-protection provisions. In June, as Reuters reported, a Seattle district court judge OK’d a $415 million settlement to resolve the four-year-old case.
Adjusted earnings per share, which exclude one-time costs, were 52 cents per share, rising from 42 cents per share a year earlier and topping the 48-cent-per-share consensus forecast 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 to $433 million from $402 million.
Revenue rose 0.9% to $1.07 billion from $1.06 billion and topped the $1.04 billion forecast of Seeking Alpha-polled analysts.
IGT extended its deal to be the California Lottery’s primary technology provider through at least October 2033 and its contract to be the retail- and internet-lottery-systems partner for the Kentucky Lottery Corp. through July 2036. During Wednesday’s conference call, IGT Chief Executive Officer Vincent Sadusky noted that California’s lottery is the nation’s second largest and that IGT’s relationship with the lottery exceeds three decades.
IGT said global gaming revenue, a recurring strength from previous quarters, was $409 million, up 8% from $379 million a year earlier, primarily driven by installed-base growth and higher system and software sales.
Global lottery revenue was $601 million, down 4% year over year. Net of the Italy commercial-services sale, revenue rose 5%, buoyed by strong same-store sales in Italy,
Global lottery same-store rose 3% in the third quarter and Italy same-store lottery revenue growth for 2023’s first eight months was 8%, Sadusky said, buoyed by increased scratch-and-win and lotto revenue. Same-store sales cover lotteries that have run for at least a year.
“Specific to lottery, we saw amazing growth in the first half of the year, both in North America and Italy, our two largest markets by far,” Sadusky said. “A lot of that was driven by instants, as well as a refreshing of the portfolio and the go-to-market strategy for lotto in Italy.”
Year to date, global shipments of game cabinets and units rose 10% in the third quarter from a year earlier, complemented by a 7% increase in average selling prices, IGT said.
“We had a great third quarter and it’s been a productive first nine months of the year,” Sadusky said. “Our results placed us firmly on track to achieve our full-year 2023 financial goals.”
IGT shares fell $1, or 3.79%, Tuesday to close at $25.42 in regular trading on the New York Stock Exchange. The shares gained after hours, rising 8 cents, or 0.31%, to settle at $25.50.
