IGT cuts quarterly cash dividend by 58 percent
International Game Technology (IGT) sliced the quarterly cash dividend it pays shareholders by 58 percent today, saying it was part of continued cost-cutting efforts by the slot machine giant.
Reno-based IGT said the move, cutting the dividend from 14.5 cents per share to 6 cents per share, will save almost $100 million.
“In the current environment, we believe a revised dividend is the most prudent decision and in the best interest of IGT and our stakeholders,” IGT Chairman and CEO TJ Matthews said in a statement.
The move is part of several initiatives that IGT has undertaken in the past year to bring costs in line. IGT reduced its workforce by some 10 percent at the end of the year and has cut costs in many departments. Still, the company reported a 7 percent decline in revenues in the first quarter.
Several analysts on Wall Street thought IGT was going to eliminate the dividend all together, investors might be happy with any kind of return.
Oppenheimer gaming analyst David Katz said the move would help strengthen IGT’s balance sheet, but might be looked upon negatively by some because the company traditionally offered a relatively high dividend.
The company, and other slot makers are more pressured this year as casino operators scale back buying new gambling equipment.
“While (IGT) is taking the right steps to reduce costs and realign its approach towards content, it still has plenty of work to do as well as some stiff industry headwinds,” Macquarie Securities gaming analyst Joel Simkins said in a note to investors.
Matthews said IGT will continue to look at coast-saving measures.
“An unprecedented credit market environment and recessionary economic conditions have suppressed industry revenue expectations for the near term,” Matthews said.
Shares of IGT traded up all day on the New York Stock Exchange, closing at $8.48, up 45 cents or 5.6 percent.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
