IGT benefits from new casinos, sports betting in 2nd quarter
East Coast casino openings and increases from growing sports betting opportunities boosted London-based IGT in the second quarter, company officials reported Tuesday.
The opening of Ocean Resort and Hard Rock Atlantic City in New Jersey and the anticipated opening of MGM Springfield in Massachusetts in August propelled the diverse slot machine, lottery and casino system manufacturer that holds a dominant presence in the Nevada market.
The gains are offsetting declines resulting from the sale of its DoubleDown Interactive unit in 2017, a weak currency conversion market and an anticipated revenue drop in Italy with new taxes on machines initiated by the new Italian government. The tax increase will be implemented gradually beginning in September and extend through 2021.
“Italian players will not be pleased,” IGT CEO Marco Sala said in a conference call Tuesday morning, but he added that the revenue decline would be “modest” and that the company would manage the increase through gains in other markets.
IGT is maintaining its 20-cents-per-share quarterly dividend, which will be payable Aug. 28 to shareholders of record on Aug. 14.
Revenue for the quarter that ended June 30 was flat at $1.2 billion (U.S.) and net income rose 8.8 percent to $209 million (U.S.) for the quarter.
IGT, once headquartered in Reno, has capitalized on technological change, releasing some of its most popular game titles on massive curved screens with a feature on some games that enables players to activate play with a wave of their hand in front of a sensor.
MGM Resorts International has contracted with IGT for its sports wagering management system and IGT announced in mid-July that it has signed a deal with fantasy sports producer FanDuel.
IGT products also are expected to have a major presence on the casino floor when MGM’s Springfield, Massachusetts property opens on Aug. 24.
Gaming analysts are expecting to receive more information on the company’s plans at an investor day presentation in New York on Thursday.
A report issued last week that included a quarterly slot survey by California-based Eilers & Krejcik Gaming said IGT lost ground to Aristocrat Technologies, AGS and Incredible Technologies in slot sales during the quarter, but 35 casinos surveyed said they still bought 21 percent of their machines from IGT.
IGT shares closed up $1.03, 4.3 percent, to $25.28 a share on heavy trading Tuesday. After hours, the stock dipped 1 cent to end at $25.27 a share.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
IGT Revenue
2Q 2018: $1.2 billion
2Q 2017: $1.22 billion
Change: -0.2%
Adjusted cash flow
2Q 2018: $442 million
2Q 2017: $424 million
Change: +4.2%
Net income
2Q 2018: $209 million
2Q 2017: $192 million
Change: +8.8%
Earnings per share
2Q 2018: 28 cents
2Q 2017: 15 cents
Change: +86.7%
