IGT sales increase; net flat

Thursday, July 22, 1999 | 11:09 a.m.

Reno-based slot maker International Game Technology reported flat earnings for fiscal 1999's third quarter today, but said product sales domestically and abroad continued to improve.

IGT reported net income for the quarter ended July 3 of $34.3 million, or 36 cents a share, compared with net of $45.6 million, or 40 cents a share, in the fiscal 1998 third quarter. Revenue rose to $258.9 million from $223 million.

The latest quarter's results included a charge of $3.3 million, or 3 cents a share, related to early redemption of senior debt. In the year-ago period, IGT had an extraordinary gain from the sale of a building in Australia of $10.3 million, or 6 cents a share.

Also affecting year-to-year comparisons was IGT's stock buyback program. The company has repurchased 18.4 million shares for $300.5 million so far in fiscal 1999, reducing the total outstanding to 96 million shares from 115.2 million in the year-ago third quarter.

IGT also noted that interest expenses were higher in the latest quarter because of increased debt. In May, the company sold $1 billion of senior notes in a private placement, using some of the proceeds to redeem older notes.

IGT said product sales jumped 28 percent in the latest quarter over the year-ago number, as it shipped 33,700 machines, compared with 22,100 in the 1998 third period.

Four new casinos openings in Las Vegas have helped boost product shipments domestically this year. In the third quarter, IGT shipped 13,000 units, up from 9,500 in the year-ago period.

During the current quarter, IGT has shipped machines to Paris-Las Vegas and the Resort at Summerlin in Las Vegas, to the MGM Grand temporary casino in Detroit and to a Washington licensee that provides games to eight Indian casinos.

Bolstered by increased business in Japan, international shipments rose to 20,700 machines in the third quarter from just 12,500 in the year-earlier period.

Revenue from gaming operations, including wide-area progressive slots such as Megabucks, were essentially flat at $91.3 million in the third quarter compared with a year ago. Gross profit on those operations was $57.5 million, or 63 percent of revenue.

IGT stock was off 25 cents, to $19 a share, in midday trading today.