GTECH confirms 2014 profit guidance, warns on sales

MILAN — Italian gaming company GTECH confirmed a full year target for core profit on Monday, but it warned about 2014 sales as its revenues from U.S. operations were below expectations in the July-September period.

The Rome-based company, which plans to complete a $4.7 billion takeover of U.S. rival IGT by June next year, said earnings before interest, tax, depreciation and amortisation (EBITDA) were up 15.2 percent to 252.2 million euros ($313.5 million) in the third quarter.

Overall sales were almost stable at 727.8 million euros, as the company, which runs the concession for the popular Lotto game in Italy, recorded a 6.8 percent drop in U.S. revenues, offset by a similar increase in its domestic sales.

Revenues from sports betting in Italy jumped 59 percent in the period, when the world soccer championship took place.

A subdued trend for sales in North America is seen continuing in the last quarter of this year, GTECH’s executives said, adding the company would miss the guidance of 3.15-3.25 billion euros for full-year revenues.

Guidance of 1.06-1.1 billion euros for core earnings was, however, confirmed during a conference call on results.

The company said the takeover of slot-machine maker IGT was proceeding as planned and its executives said shareholders dissenting on the deal and exercising their right of withdrawal would be lower than a key threshold of 20 percent.

The acquisition of IGT will not go ahead should shareholders representing more than 20 percent of GTECH’s capital exercise their exit rights, which entitle them to sell their shares back to the company.

“We really think the 20 percent threshold is a very important number for a company which has a 40 percent float,” Chief Executive Marco Sala said.

Around 60 percent of the company is owned by the De Agostini family, which sponsored the acquistion of IGT announced last July.