Light & Wonder posts wider loss, but revenue tops Street forecasts

Light & Wonder posts wider loss, but revenue tops Street forecasts

  • Matthew Crowley
August 9, 2022 11:55 PM
  • Matthew Crowley
  • United States
  • Suppliers

Light & Wonder touted the completed divestiture of its lottery business and reduced debt during its second-quarter earnings report. But the Las Vegas-based developer of cross-platform games and entertainment’s results were mixed from Wall Street’s perspective: earnings per share missed forecasts, but revenue topped them.

In a statement Tuesday, Light & Wonder, formerly called Scientific Games, had a net loss of $150 million, or $1.62 per share, for the three months ended June 30, compared with a net loss of $51 million, or 58 cents per share, a year earlier.

The company said a $147 million loss on financing transactions associated with the debt paydown and transaction refinancing fueled the wider second-quarter loss.

The latest results fell short of the 5-cents-per-share profit analysts surveyed by Seeking Alpha had expected on average.

Earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, fell 8.6% to $212 million from $232 million.

Revenue rose 5% to $610 million from $581 million.

“We made great strides in the second quarter as we continued to execute on our vision and the transformation of our company,” Chief Executive Officer Barry Cottle said in the statement. “We now have all the pieces in place and are singularly focused on building great games fully cross-platform.”

Light & Wonder said its lottery-business divestiture yielded $5.7 billion in gross cash proceeds and that the sale of its sports-betting business is expected to close by year’s end, given applicable regulatory approvals.

Light & Wonder said it expects to receive $750 million in cash for selling its OpenBet sports-betting platform to Endeavor, along with $50 million in Endeavor’s Class A common stock. The deal is expected to close in the third quarter.

Light & Wonder had expected $1 billion in cash and $200 million in stock when it announced the OpenBet sale in September 2021. But the sides amended the deal on June 30 and Endeavor agreed to waive a closing condition requiring Nevada Gaming Control Board approval if required.

Chief Financial Officer Connie James said her company paid down $4.9 billion of debt in the quarter and bought back about 3.7 million shares of common stock for $203 million. Those shares represent 27% of the buybacks authorized in a program started in March.

Shares of Light & Wonder fell 91 cents, or 1.7%, Tuesday to close at $52.66 on the Nasdaq stock market. The share price has fallen 21.4% in 2022.

Follow Matthew Crowley on Twitter @copyjockey

Follow Matthew Crowley on Twitter @copyjockey.