Gaming news briefs for June 8, 2004

Tuesday, June 8, 2004 | 11:24 a.m.

Vegas slot maker's stock plunges on weakening outlook

Stock of Alliance Gaming Corp. of Las Vegas, the second-largest maker of slot machines in North America, sunk this morning after the firm said earnings this year will rise less than the company forecast because some of the games it sells weren't as profitable as it expected.

Alliance shares fell $4.34, or 20 percent, to $17.05 in early trading.

Earnings from continuing operations will be 96 cents to $1 a share for its 2004 fiscal year ending June 30, below its previous forecast of $1.04, Las Vegas-based Alliance said in a statement. The company earned 74 cents a year earlier on a comparative basis.

Alliance said lower yields on certain games, higher expenses and slower approval of "new game revisions" in the New York lottery market is hurting profit. Alliance trails International Game Technology in slot-machine sales.

The company said it expects to earn $1.20 to $1.30 a share in 2005 on sales of $600 million, down from its earlier forecast of "at least" $1.40 a share.

Mixed ruling issued in dispute with former CEO

SYDNEY, Australia -- Aristocrat Leisure Ltd., the world's second-biggest slot-machine maker, doesn't have to pay former Chief Executive Des Randall a A$12 million ($8.4 million) severance claim, the company said the New South Wales Supreme Court ruled.

The court decided that Randall is entitled to receive his 2002 bonus of A$900,000 and ruled against the company's claim for A$400,000 of expenses against Randall, Sydney-based Aristocrat said in a statement.

Randall was fired in April 2003 after the company said earnings would miss forecast because of slowing sales in the United States. David Creary replaced Randall on an acting basis until Paul Oneile was formally appointed in December.

Last month Aristocrat forecast net income in the six months ended June 30 of as much as A$60 million, compared with a A$33 million loss a year earlier, which didn't include any provisions related to the Randall litigation.

The stock shed 1 cent to A$4.80 at 12:19 p.m. today in Sydney. The shares have gained 179 percent this year, making it the best performer in the benchmark S&P/ASX 200 Index.