IGT cuts quarterly dividend

By Steve Green

Tuesday, March 3, 2009 | 8:16 a.m.

International Game Technology of Reno today said it slashed its quarterly dividend in order to save about $100 million per year.

IGT, maker of slot machines and casino information and networking systems, said its board of directors on Monday declared a quarterly cash dividend of 6 cents per share, payable on April 7 to shareholders of record on March 24.

The dividend was cut from 14.5 cents per share. IGT shares opened higher this morning on the news, trading up 37 cents at $8.40.

"In the current environment, we believe a revised dividend is the most prudent decision and in the best interest of IGT and our stakeholders," Chairman and Chief Executive TJ Matthews said in a statement.

"An unprecedented credit market environment and recessionary economic conditions have suppressed industry revenue expectations for the near term," said Matthews. "Although the company continues to generate strong cash flow, a reduction to the dividend will allow the company to continue to return value to our shareholders at a competitive market rate and supports our efforts to fortify our balance sheet to ensure IGT is well-positioned to invest in growth opportunities over the long term."

With the recession reducing spending by gamblers at casinos, IGT faces a decline in sales to the gaming industry. During the past five months it moved to cut expenses twice by cutting jobs — 460 in November and 200 more in January.

IGT, a big employer in Reno and Las Vegas, said on Jan. 22 it remained profitable, but less so than during 1997.

IGT earned $65.7 million or 22 cents per share in the period ended Dec. 31 vs. a profit a year earlier of $113.7 million or 36 cents per share. Product sales declined 8 percent to $288.3 million.