Quarterly earnings improve for Bally Technologies

Slot machine maker Bally Technologies Inc. was able to increase its fourth quarter revenues from better than expected sales and gaming operations, even as the company's operations income fell.

The Las Vegas-based gambling equipment provider said Thursday those mixed results helped it generate $214 million in fourth quarter revenues compared to $195 million for the same period last year.

Net income was $25.5 million, or 51 cents per share, down from $51.1 million, or 89 cents a share, last year.

Analysts surveyed by Yahoo Finance expected Bally to report earnings of 55 cents a share, on revenue of $203.5 million.

The fourth-quarter results were affected by a 5-cent-per-share write-off related to refinancing debt and repurchasing 9.9 million shares of its common stock in May.

"During fiscal 2011, we intensified our focus on creating long-term value for our shareholders by repurchasing nearly $475 million worth of our common stock," said Neil Davidson, chief financial officer, in a statement.

Davidson said Bally also closed on a $700 million credit line during the fourth quarter, which should increase the company's "financial flexibility" and lower borrowing costs.

For the full fiscal year, Bally Technologies reported revenues of $758 million, or $1.82 a share, compared to $778 million, or $2.18 a share, for fiscal year 2010. Analyst had expected revenue of $749 million, a 3.8 percent decline in year-over-year revenue.

Net income for the year that ended June 30 was $97.8 million, compared with $137.4 million in 2010.

"The highlight of Bally's fiscal 2011 was the positioning we accomplished for the future," said Richard Haddrill, Bally's chief executive officer. "We grew gaming operations revenue by 11 percent and established a strong base of innovative games going forward."

Haddrill said the company's expansion in Australia and Italy in 2011 should "provide good revenue and earnings growth in the current and future years."

Bally saw its average selling price of new gaming devices increase 10 percent to a record $15,832 per unit from $14,398 last year. However, new gaming device sales decreased to 13,537 in fiscal 2011 compared with 17,334 last year.

The slump in new gaming device sales was attributed to a sluggish North American replacement market, fewer casino openings and expansions, and lower international sales, the company's earnings report said.

Bally also forecast first quarter and full-year 2010 earnings that could fall short of analysts expectations.

The company expects to earn 40 cents a share in the first quarter ended Sept. 30, while for fiscal year 2012 it expects earnings of $2.15 a share. Analysts expected 53 cents and $2.59, respectively.

The company cited higher taxes, increased production costs and weak replacement sales for the weak forecast.

Bally announced earnings after the close of trading on the New York Stock Exchange. Shares of the company closed Thursday at $35.24, up $2.64, or 8.1 percent.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.