London-based IGT rode a stronger-than-expected fourth quarter and benefits from the U.S. tax reform to top analysts’ projections and finish 2017 at the high end of the company’s cash flow guidance.
A leading diversified international gaming equipment manufacturer with a major presence in Las Vegas, IGT on Thursday reported adjusted earnings of $268 million, 2 cents a share, on revenue of $1.35 billion for the quarter that ended Dec. 31.
In the same quarter a year earlier, IGT reported adjusted earnings of $281 million, 88 cents a share, on revenue of $1.32 billion.
A survey of six Wall Street analysts had projected the company would generate $1.25 billion in revenue for the quarter and the average of five analysts hit right on the pre-adjustment earnings estimate of 39 cents a share.
Higher-than-expected lottery sales and the best quarter of the year for slot-machine sales enabled the company to pay a 20-cents-per-share dividend as well as slash debt by 3 percent as well as operating expenses.
The company also benefited from the closing of the sale of its Double Down Interactive social gaming subsidiary to a South Korean company for $825 million.
IGT realized a one-time gain of $78 million as a result of U.S. tax reform legislation approved in December.
IGT CEO Marco Sala said the company’s strong finish in 2017 set it up for growth this year.
“These achievements were enhanced by disciplined expense management,” Sala said. “Bringing innovative content and technology to market remains the cornerstone of our strategy and last year, we executed well along this path and established a solid foundation for growth in 2018 and beyond.”
In a conference call with investors Thursday morning, Sala also cited growth in systems and software sales, noting that the company installed a system at MGM Resorts International’s new property near Macau’s Cotai Strip as well as a replacement system at Station Casinos’ Palms property in Las Vegas.
Sala also said the company had a strong quarter in sports wagering in Italy. The company is expected to compete in the U.S. sports betting market if the U.S. Supreme Court strikes down the Professional and Amateur Sports Protection Act as expected.
IGT stock closed up $2.21 a share, 8 percent, to $29.86 a share and climbed another 4 cents, 0.1 percent, to $29.90 a share in after-hours trading on more than double the average daily volume.
Fourth-quarter revenue and earnings for London-based IGT. (New York Stock Exchange: IGT).
4Q 2017; 4Q 2016; Change
Revenue: $1.35 billion; $1.32 billion; +2.3%
Earnings: $268 million; $281 million; -4.6%
Earnings per share: 2 cents; 88 cents; -97.7%