Alliance postpones its earnings report

Wednesday, Aug. 10, 2005 | 10:38 a.m.

Las Vegas-based Alliance Gaming Inc. postponed the release of its fourth-quarter earnings Tuesday, citing an incomplete auditing process.

Company officials said they expect quarterly and year-end figures to be released the week of Aug. 26.

Analysts expressed concerns about the delay of the release.

"Alliance is currently trading 2 1/2 times above its historical one-year forward multiple, which we believe is alarming," Steven Wieczynski of Legg Mason said in a note to investors issued today. "We believe that Alliance deserves a lower multiple to the rest of the group due to its reduced earnings visibility, unproven operating platform and a weak game library."

"While Chief Executive Officer Richard Haddrill commented that he is more upbeat about (Alliance's) prospects than he was back in April, we believe that the delay in releasing fourth-quarter results could serve to heighten investor concern over AGI's earnings potential and ongoing compliance with its bank covenants," added Marc Falcone of Deutsche Bank in a note to investors.

A consensus of analysts covering the company expect earnings of 9 cents a share and revenue of $127.2 million.

Alliances stock price closed up 24 cents a share Tuesday to $15.21, a 1.6 percent increase.

The company, which manufactures slot machines under the Bally brand and operates a casino in Mississippi, conducted a conference call that had been scheduled in conjunction with the earnings release to update investors on 2006 fiscal year guidance other company developments.

Company officials said revenue growth from the Bally unit should be sequentially higher and that earnings in 2006 should be stronger, estimating a range of between 30 cents and 50 cents a share. Analysts have projected earnings at 43 cents a share for the year.

"Alpha-based games sold or on trial in traditional markets totaled approximately 1,900, which is at the higher end of the range of previous management guidance, the company said in a Tuesday release.

"The Alpha game library continues to grow and today stands at between 15 and 20 games approved in most major jurisdictions and is on target with managements announced plans for approximately 30 titles by calendar year end, the company said. "However, in general, our trends for the sale of games in the domestic markets continue to be at a level below that of the prior two years.