- Up strongly in premarket trading, IGT (IGT +1.4%) is now seeing moderate gains after beating Q4 estimates (strongly on EPS) and reporting free cash flow of $205M. The gaming/lottery system provider also forecast it would see strong 2016 growth in its core operations, and hiked its annual cost synergy target for the Gtech merger by $40M to $270M.
- With the assumption that the company's Italian lotto concession bid will be successful, IGT expects 2016 adjusted EBITDA of $1.74B-$1.79B, up from 2015 pro forma adjusted EBITDA of $1.7B (at the high end of prior guidance). Forex, higher Italian gaming machine taxes, and new lotto concession terms.
- North American gaming/interactive revenue fell 3% Y/Y on a pro forma basis in Q4 to $378M. North American lottery rose 10% to $269M, international rose 5% to $265M, and Italy (due to a strong dollar) fell 7% to $455M. 2015 free cash flow was $383.6M (down from $730.7M a year earlier), and IGT ended 2015 with $7.7B in net debt.
- A $0.20/share quarterly dividend has been declared. It's payable on April 14 to shareholders on record as of March 31. IGT also discloses former Travelocity exec Tracy Weber has left the board; it now has 12 members.
- IGT expects to end 2016 with $7.7B-$7.9B in net debt. The company notes "a successful renewal of the Italian Lotto concession would require additional capital expenditures in 2016 of at least $660 million."
- The numbers come three weeks after peer Scientific Games surged in the wake of a Q4 sales beat.