In Brief: Bally shares fall, Electro Rent Corp., Interstate layoffs
Bally Technologies shares fall 14 percent day after report
Shares of Bally Technologies Inc. lost more than 14 percent Friday a day after the slot machine manufacturer issued a weak earnings outlook due to a struggling casino games industry.
The weak outlook caused one analyst to downgrade the company's stock.
Joseph Greff, of JP Morgan Securities, cut Bally Technologies to "neutral" from "overweight," saying the company was not seeing an increase in demand for replacement slot machines.
"A lack of new market opportunities and increased competition" from International Game Technology and Japan's Konami also contributed to Graff's downgrade.
The Las Vegas-based maker of games and software has been struggling over the past two years as slot machines sales have declined, with resorts cautious about spending in the wake of a recession that has forced a number of gaming companies into bankruptcy.
"After a quarter characterized by strong levels in several key business segments, we believe management's fiscal outlook is a bit timid but perhaps justifiable given the past challenges meeting expectations," said David Katz an analyst with Jefferies & Co. Inc.
On Thursday, Bally's forecast first quarter and full year 2012 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 the fiscal year 2012, it expects earnings of $2.15 a share. Analysts surveyed by Yahoo Finance expected 53 cents and $2.59, respectively.
"That said, we believe that Bally's unique strategic position relative to its competitors suggests meaningful upside in the second half of fiscal year 2012 as Bally's continues to gain product momentum and well defined opportunities come online," Katz said.
Katz on Friday reiterated his "buy" rating.
Steven Wieczynski, an analyst with Stifel Nicolaus Capital Markets, agreed with Katz's assessment of a "meaningful second half" of fiscal year 2012. He said their outlook was "consistent with the industry outlook recently articulated its their competition."
Wieczynski said Bally management's bleak near-term outlook was responsible for him keeping his "hold" rating.Bally's stock price dropped $5.02, or 14.25 percent, to $30.13 on extremely heavy volume of 3.9 million shares traded on the New York Stock Exchange. The company's average daily volume was 641,102 over the past 30 days.
California company acquiring
assets of Electro Rent Corp.
California-based Electro Rent Corp. plans to acquire the assets of Equipment Management Technology Inc., a privately held provider of electronic test equipment that filed for bankruptcy earlier this year.
Equipment Management Technology, which is based in Las Vegas, was acquired for approximately $11.1 million in a private sale through the U.S. Bankruptcy Court.
"EMT's electronic test equipment business is well-matched to our own," said Daniel Greenberg, chairman and CEO of Van Nuys, Calif.-based Electro Rent, in a statement.
"This strategic transaction will deepen our equipment portfolio to help ensure that we are continually surpassing our mutual customers' needs and expectations," he added.
Founded in 1995 by Vito Longo, Equipment Management Technology rents sells and leases new and used electronic test equipment primarily to the aerospace and defense industries.
Plumbing, air-conditioning company lays off staff of 335
Interstate Plumbing & Air Conditioning LLC, a multistate operator based in Las Vegas, said Friday it has laid off its entire staff of 335 workers.
On Wednesday, Interstate Plumbing suspended some of its operations because of ongoing financial problems. G2 Capital Advisors LLC, a national restructuring firm, had been advising the struggling company and working with lenders to restructure the company.
"We are doing everything possible at this point to ensure Interstate employees receive that which is due them, as well as assisting them with issues associated with layoffs such as applying for unemployment," the company said in a statement.
Interstate Plumbing provides plumbing and HVAC installation for new homes and commercial buildings. The company is licensed in Nevada, Arizona, California and Utah.
