IGT: The Game Maker To Own
International Game Technology - Unique Mix Of Growth Potential And Cash Returns
Core Equity Research
Core Equity Research
Fri, Jun. 24, 11:49 AM
- Scientific Games (SGMS -7%) -- the firm that helps run lotteries around the world, including 40 U.S. state lotteries -- says its most prized secrets have been stolen by an exec hired away by rival International Game Technology (IGT -1.5%).
- In court filings, Scientific Games says its former VP Brian Keith Cash orchestrated a "massive theft," downloading thousands of files at the time he accepted a position with IGT.
- The company is asking a federal judge to prevent the use of the information. With operations in Georgia, Scientific Games has filed in U.S. District Court in the state.
Thu, May 26, 1:48 PM
- International Game Technology (NYSE:IGT) is up 1.6% to its highest point in a month after a Q1 profit beat where revenues rose on a reported and pro forma basis.
- Global lottery growth was strong and the company won a key Italian Lotto concession, one of its biggest contracts.
- Revenue breakout: Service, $1.135B (up 43.6%); Product sales, $146.4M (up 152.6%). The April 7, 2015, combination of GTECH and IGT affected comparability. By segment (pro forma basis): North America Gaming & Interactive was flat, North America Lottery revenue was up 16%, International revenue fell 2%, and Italy revenue rose 2.3%.
- It reiterated guidance of EBITDA of $1.74B-$1.79B for the full year (in line) against modest currency headwinds, and capex excluding Lotto concessions of $575M-$625M.
- The company will hold its investor day June 21-22.
- Earnings call transcript
- Press Release
Wed, Mar. 16, 2:50 PM
- IGT's (IGT +7.5%) Italy-based Lottomatica subsidiary is leading a consortium bidding on an Italian lotto concession.
- If the consortium wins, Lottomatica will "serve as the principal operating partner to fulfill the requirements of the Lotto license." A JV will be set up (following a winning bid) in which Lottomatica has a 61.5% stake, a firm known as Italian Gaming Holding (IGH) has a 32.5% stake, and two other firms the rest. Lottomatica could end up acquiring IGH's stake under certain conditions.
- The announcement comes ahead of IGT's Thursday morning Q4 report. Shares are posting big gains on a day the S&P is up 0.7%.
- Last month: IGT gains following Scientific Games' earnings
Fri, Feb. 26, 10:04 AM
- Beaten-up Scientific Games (SGMS +32.5%) is taking off after beating Q4 sales estimates and reporting a $54.4M op. loss (down from $156.4M a year ago). Though net loss was officially $127.5M ($1.48/share), the figure accounts for $137M in pre-tax impairment, and other charges.
- On a pro forma basis (accounts for the Bally acquisition), gaming revenue rose 7% Y/Y to $469M - gaming operations revenue fell, but machine, system, and table products revenue rose. Instant games revenue rose 1% to $142M, services revenue fell 6% to $49M, product sales revenue fell 41% to $16.7M, and interactive revenue rose 28% to $60.3M.
- With the help of acquisition synergies, pro forma SG&A spend fell 28% Y/Y to $138.2M, and R&D spend 26% to $43.1M. Adjusted EBITDA margin rose to 39.7% from 30.6% a year ago. SGMS ended 2015 with $128.7M in cash and $8.21B in debt.
- Peer IGT (IGT +2.6%), which reports on March 17, is up moderately.
- Scientific Games' Q4 results, earnings release
Aug. 19, 2015, 12:32 PM
- Goldman's Steven Kent has launched coverage on IGT (IGT -3.6%) with a Sell rating and $15.50 target, and on fellow gaming machine maker Scientific Games (SGMS -8.6%) with a Sell and $7.50 target.
- Regarding IGT, Kent sees "limited clarity around [Gtech merger] synergies, cash use, and brand integration," and thinks the company will likely be “challenged by acquisition-related issues, declining market share, and concentration in Italy/lottery.” He adds a survey of slot managers indicated 44% plan to buy fewer IGT machines this year.
- Likewise, Kent thinks SGMS could suffer "growing pains" related to the Bally Technologies merger, and notes it's "the single most levered company in our coverage [universe]," with $8.4B in net debt. Capex needs, meanwhile, are seen potentially offsetting operating expense cuts.
Aug. 11, 2015, 2:13 PM
- IGT has rallied towards $20 on a down day for stocks after beating Q2 EPS estimates, slightly missing on revenue, and announcing a $0.20/share post-merger quarterly dividend.
- Cost savings related to the Gtech merger provided a lift to EPS. IGT is aiming for $230M/year in cost synergies by April 2018, and to achieve 2/3 of this total by April 2016.
- Though officially rising 36% Y/Y, Q2 revenue fell 9% on a pro forma (merger-adjusted) basis. North American Gaming & Interactive revenue -8% to $353M; North American Lottery +14% to $270M (-3% exc. year-ago penalties); International +2% to $247M (+17% exc. forex); Italy -22% to $432M (-4% exc. forex).
- North American machine and social gaming revenue was strong, while non-machine and participation revenue was soft. International sales benefited from lottery terminal and machine growth; Italian sales benefited from lottery growth, and were hurt by higher taxes.
- IGT ended Q2 with $557M in cash, and $8.38B in net debt.
- Q2 results, PR
Apr. 17, 2015, 5:36 PM
Apr. 16, 2015, 3:19 PM
- Today's notable tech gainers include Chinese online gaming/entertainment platform YY (YY +4.5%), Chinese search engine/portal owner Sohu (SOHU +5.4%), U.S. solar installer Vivint (VSLR +4.9%), U.S. solar installer Vivint (VSLR +4.9%), solar power optimizer/inverter maker SolarEdge (SEDG +5%), M2M hardware/software provider I.D. Systems (IDSY +8.9%), DSP core IP provider Ceva (CEVA +7.2%), cloud healthcare software provider Castlight (CSLT +6.1%), and NAND controller/4G transceiver vendor Silicon Motion (SIMO +4.8%). The Nasdaq is nearly flat.
- Notable decliners include local services marketplace Angie's List (ANGI -6.6%), IP licensing firm Acacia (ACTG -4.4%), and gaming system maker IGT (IGT -5.1%).
- Dougherty has launched coverage on I.D. Systems at Buy, and Canaccord has done the same for Ceva. Vivint is one of several solar firms to get an Outperform rating from Avondale Partners. Silicon Motion has surged to fresh 52-week highs, and is up 22% since last week's Q1 pre-announcement.
- Angie's List is giving back some of the big gains seen yesterday after announcing long-time CEO Bill Oesterle plans to retire, and slightly hiking its 2015 adjusted EBITDA guidance. IGT is returning a chunk of the gains seen last week following the closing of the Gtech merger.
- Previously covered: Etsy, AMD, Fairchild, SanDisk, 58.com, Audience, Travelzoo, Sequans, Carbonite, Identiv
Apr. 7, 2015, 12:53 PM
- IGT's $4.7B merger with Italian lottery system/service provider Gtech is officially on the books. On their first day of trading, the post-merger company's shares have surged towards $20.
- The merged company, which goes under the IGT name, is the world's biggest provider of both lottery and gaming machines. Its total annual sales top $6B.
Apr. 7, 2015, 9:13 AM
Jul. 16, 2014, 9:14 AM
Jul. 10, 2014, 9:14 AM
Jun. 13, 2014, 12:43 PM
- Holding company MacAndrews & Forbes is interested in bidding for IGT, as are P-E firms Apollo Global and Carlyle, Reuters reports.
- The news service reported on Monday IGT had "attracted interest from other gaming companies as well as private equity firms," but didn't give names.
- Scientific Games (SGMS) and Bally (BYI) are once more following IGT higher.
Jun. 9, 2014, 4:00 PM
- Reuters reports IGT (IGT +14.3%) has "attracted interest from other gaming companies as well as private equity firms," as it works with Morgan Stanley to explore a sale.
- Presentations for prospective buyers are reportedly being held. Sources caution uncertainty related to the selloff in IGT's shares could turn buyers away, and that a lengthy regulatory review process might await.
- Tumbling gaming product sales have and soft game operations revenue have led IGT to deliver multiple earnings disappointments. The company's interactive (social gaming) ops have fared better.
- Peers Scientific Games (SGMS +5.1%) and Bally (BYI +1%) have received sympathy bids.
- Earlier: IGT jumps on takeover talk
Jun. 9, 2014, 3:27 PM
Apr. 23, 2014, 2:07 PM
- IGT (IGT -10.4%) posted FQ2 EPS that was slightly above the guidance provided in a March 25 warning, and reiterated a forecast for FY14 (ends Sep. '14) EPS of $1-$1.10. But the company also reported gaming product sales (40% of revenue) fell 27% Y/Y to $202.6M, after having grown 4% in FQ1. Machine units recognized fell 45% to 7.9K, a reversal from FQ1's 20% growth.
- Gaming operations revenue fell 9% Y/Y to $230.4M (-8% in FQ1), with IGT's installed base falling 6% to 53.4K and yield declining 5% to $47; weaker MegaJackpots revenue is blamed.
- Interactive revenue rose 20% Y/Y to $79.8M (thanks to a 27% increase in social gaming revenue), but that's a slowdown from FQ1's 41%. DoubleDown's MAUs fell 1% to 6.2M after growing 26% in FQ1, but its bookings per DAU rose 16% to $0.43.
- Peers are also lower: BYI -3.9%. MGAM -2.1%. SGMS -4.1%.
FQ2 results, PR, CC transcript
International Game Technology PLC., engages in end-to-end gaming company. The company is headquartered in Las Vegas, NV.
Industry: Diversified Computer Systems
Country: United States
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