International Game Technology Down 8% As Q4 Adj Profit Misses View

(RTTNews) - Shares of International Game Technology (IGT) are losing nearly 8 percent on Thursday after the slot machine maker reported adjusted earnings per share for the fourth quarter that missed analysts' expectations by four cents. However, quarterly revenues edged up and topped estimates.

The company also reported a profit for the quarter that decreased from last year, despite improved margins and revenue growth, reflecting higher income tax provision. The company also initiated earnings outlook for the full-year 2014, in line with Street view.

"We continue to drive significant revenue and earnings per share growth through the successful execution of our strategy and disciplined approach to capital allocation," CEO Patti Hart said in a statement.

The Las Vegas, Nevada-based company reported net income of $63.5 million or $0.24 per share for the fourth quarter, higher than $88.1 million or $0.33 per share in the prior-year quarter.

Income from continuing operations for the quarter declined to $63.5 million or $0.24 per share from $90.1 million or $0.33 per share in the prior-year quarter.

Excluding items, adjusted income from continuing operations for the quarter was $79.8 million or $0.30 per share, compared to $101.9 million or $0.38 per share last year.

On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter edged up to $632.3 million from $631.1 million in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of $603.05 million.

Revenues at gaming operations declined 6 percent to $247 million, while product sales revenues edged down to $312 million from a year ago. Interactive revenues increased 35 percent to $73 million from last year.

Operating income margin improved 300 basis points to 20 percent from last year as operating expenses as a percentage of total revenues decreased 400 basis points to 37 percent from last year.

Additionally, the company also announced its intention to enter into a $200 million accelerated share repurchase agreement, further demonstrating its continued commitment to shareholder returns.

For fiscal 2013, the company reported net income of $272.7 million or $1.03 per share, higher than $245.9 million or $0.85 per share in the prior year. Income from continuing operations grew to $272.7 million or $1.03 per share from $249.7 million or $0.86 per share in the prior year.

Excluding special items, adjusted income from operations for the year was $336.7 million or $1.27 per share, compared to $301.1 million or $1.04 per share a year ago quarter. Analysts expected earnings of $1.31 per share.

Total revenue for the full year increased nine percent to $2.34 billion from $2.15 billion posted last year, with analysts were expecting revenues of $2.31 billion.

Looking ahead to fiscal 2014 and based on current expectations, the company provided initial guidance for adjusted earnings from continuing operations in a range of $1.28 to $1.38 per share. Street is currently looking for full-year 2014 earnings of $1.34 per share.

"Our goal, as always, is to maximize our returns to shareholders through targeted share repurchases, consistent dividends and robust earnings growth," Hart added.

In Thursday's regular trading session, IGT is currently trading at $18.07, up $1.54 or 7.85% on a volume of 2.20 million shares.