IGT reports drop in 3Q profit to $9M, as revenue grows to $1.2B

IN ITS second time reporting quarterly results following completion of the merger of GTECH and IGT, International Game Technology posted net income of $9 million, or 4 cents per diluted share, in the third quarter, compared with profit of $73.9 million, or 44 cents per diluted share, a year ago.
IN ITS second time reporting quarterly results following completion of the merger of GTECH and IGT, International Game Technology posted net income of $9 million, or 4 cents per diluted share, in the third quarter, compared with profit of $73.9 million, or 44 cents per diluted share, a year ago.

PROVIDENCE – In its second time reporting quarterly results following completion of the merger of GTECH and IGT, International Game Technology PLC posted net income of $9 million, or 4 cents per diluted share, in the third quarter, compared with profit of $73.9 million, or 44 cents per diluted share, a year ago.
IGT, which merged with GTECH in April, said in the earnings release that 2015 results were adversely impacted by the “strengthening of the U.S. dollar” compared with the euro.
The daily average U.S. dollar to euro foreign exchange rate was $1.11 in the third quarter, compared with $1.33 in the third quarter of 2014.
Revenue for the combined company grew 29.6 percent to $1.2 billion compared with $938 million for only GTECH in the 2014 third quarter.
However, on a pro forma basis, which represent the combined results of both companies in 2014, revenue fell 18 percent from $1.47 billion in the third quarter of 2014. On a “constant dollar” basis, that is removing the effects of the strengthening of the dollar, revenue fell 10 percent for the period.
Marco Sala, CEO of IGT, said the company “is pleased to report third-quarter profitability in line with our expectations in this year of transformation.”
“In our global lottery operations, we delivered another resilient set of results and we are encouraged by our new game performance. As expected, product sales moderated from the second quarter’s high level,” he said.
Among the operating segments a (which the company separated out differently from a year ago), North America Gaming & Interactive had revenue of $341 million in the third quarter, compared with $37 million for only GTECH during the year-ago period. On a pro forma basis, combining results from both previous companies, revenue fell 18.8 percent year over year, and 17.7 percent on a constant currency basis.
The North America Lottery had $253 million in revenue in the quarter, a 6 percent increase over the year, but 1.8 percent lower on a pro forma basis, with a 1.3 percent drop when foreign exchange factors are removed.
International revenue grew 52.9 percent to $211 million from $138 million a year ago for GTECH alone, but fell 22.6 percent when combining the results of the previous stand-alone companies, and 11.5 percent on a constant-currency basis.
The Italy segment had $414 million in revenue, which was 21.1 percent lower than last year’s $525 million, mainly due to the weakening of the euro against the dollar, the company said. When the effects of the strengthening dollar are removed, the decline in revenue was 7.6 percent, according to the company.
The new company has more than four times as much long-term debt on its balance sheet thanks to the merger, at $8.7 billion. And despite its growth in size, IGT showed a 33.2 percent decline in net cash from from operating activities through the first nine months of the year.
Despite those results, company Chief Financial Officer Alberto Fornaro said “our financial position remains solid. … Based on our year-to-date results and current top-line visibility, we are confident in reaching the top half of our adjusted EBITDA outlook.”

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