Revenue dips, profit up for Bally
Slot machine maker Bally Technologies grew its quarterly earnings despite declining revenues brought on by casinos holding back on equipment purchases.
The Las Vegas-based gambling equipment provider said Wednesday it had net income of $33.2 million, or 58 cents per share, in the fourth quarter ended June 30, up from net income of $31.3 million, or 54 cents a share, a year earlier.
Analysts polled by Reuters Estimates expected Bally to report earnings per share of 55 cents.
Revenues fell 17.1 percent to $205.1 million from $247.4 million.
"Despite the continued challenging economy which has negatively impacted our customers' capital spending, our diversified business model drove yet another very profitable quarter," Bally Technologies Chief Executive Officer Richard Haddrill said in a statement.
Haddrill added that Bally improved its gross margins on slot machine sales while expenses fell. The company's average slot machine price was $14,245 in the quarter, which compared with $13,329 a year ago.
MorganJoseph gaming analyst Justin Sebastiano said the lack of new casino openings and a marked slowdown by casinos replacing older slot machines contributed to the company's declining revenues.
However, Sebastiano said Bally has been able to implement cost controls that showed up on the bottom line.
For the full fiscal year, Bally Technologies said it had net income of $126.3 million, or $2.22 a share, up from net income of $107.2 million, or $1.85 a share, a year earlier.
Full-year revenue fell 1.8 percent to $883.4 million from $899.7 million.
Bally said new slot machines and an expected improvement in spending by casinos starting next year would offset the current sluggish North American slot machine replacement market and an overall weakness in the economy.
Bally announced earnings after trading closed on the New York Stock Exchange. Company shares closed Wednesday at $37.61, down 51 cents, or 1.34 percent.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
