GTECH profit increases, revenue falls in 3Q

GTECH REPORTED AN INCREASE in net income, but a drop in revenue in its third-quarter earnings report released on Monday. / PBN FILE PHOTO
GTECH REPORTED AN INCREASE in net income, but a drop in revenue in its third-quarter earnings report released on Monday. / PBN FILE PHOTO

PROVIDENCE – GTECH S.p.A. on Monday reported third-quarter net income of 44 million euros ($58.5 million based on the exchange rate of $1.33 per euro), a 13 percent increase compared with net income of 39 million euros ($51.5 million) during the same period last year.

GTECH’s euro-denominated revenue dropped slightly in the third quarter, however, from 730 million euros ($963.6 million) to 728 million euros ($968.2 million) in third quarter of 2014.

Revenue and operating income in the Providence-based Americas division fell 7.2 percent and 75 percent, respectively. Revenue for the Americas went from 251 million euros ($331.3 million) in the 2013 third quarter to 234 million euros ($311.2 million). Operating income was 28 million euros ($37 million) in the third quarter of 2013, compared with 7 million euros ($9.3 million) in 2014 third quarter.

Revenue in GTECH’s International segment fell 13.6 percent to 70 million euros ($93.1 million), as operating income dropped 26.7 percent to 11 million euros ($14.6 million). Sales for the company’s Italy division increased 6.5 percent to 424 million euros ($563.9 million), with operating income showing a 81.9 percent gain to 151 million euros ($200.8 million) for the period.

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The company, in its earnings statement, blamed “unfavorable multistate jackpot activity” affecting same-store growth sales in the United States.

GTECH said in a press release that it had “a solid quarter benefiting from diversity of revenue sources” and that positive results in Italy had offset low product sales and jackpot activity. The company also had lottery contract wins in Missouri, Washington, Mexico and South Africa.

“In a solid quarter, we were able to make up for the significant product sales of 2013 and for lower jackpot activity this year, and deliver stable revenues and higher profitability, thanks to the diversity of our revenue base,” Marco Sala, CEO of GTECH S.p.A., said in a statement. “Our planned acquisition of IGT is progressing on schedule.”

GTECH plans to acquire International Game Technology of Las Vegas.

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