Scientific Games Earnings Preview

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Investors braced for a bumpy ride ahead of Scientific Games' (NAS: SGMS) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday. Scientific Games is a supplier of technology-based products, systems, and services to gaming markets worldwide.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Scientific Games, with four of six rating it a buy and the remainder rating it a hold. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $213.6 million in revenue this quarter. That would represent a decline of 3.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.05 per share. Estimates range from breaking even to a profit of $0.10.

What our community says:
CAPS All-Stars are solidly behind the stock with 91.9% assigning it an outperform rating. The community at large concurs with the All-Stars with 89.7% awarding it a rating of outperform. Fools are bullish on Scientific Games, though the message boards have been quiet lately with only 56 posts in the past 30 days. Scientific Games' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

46.0%

43.1%

43.2%

39.9%

Operating Margin

13.1%

7.3%

(5.2%)

9.8%

Net Margin

3.2%

(3.5%)

(74.7%)

3.9%

For all our Scientific Games-specific analysis, including earnings and beyond, add Scientific Games to My Watchlist.

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At the time this article was published

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