How the Wheels Came Off International Game Technology's Bus

Seth Jayson, The Motley Fool
Updated

International Game Technology (NYS: IGT) reported earnings today. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), International Game Technology missed on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue shrank, and earnings per share shrank significantly.

Margins contracted across the board.

Revenue details
International Game Technology reported revenue of $446 million. The 13 analysts polled by S&P Capital IQ hoped for a top line of $486 million. Sales were 4.2% lower than the prior-year quarter's $465 million

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.17. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.22 per share. GAAP EPS of $0.17 for Q1 were 34% lower than the prior-year quarter's $0.25 per share.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 56.5%, 290 basis points worse than the prior-year quarter. Operating margin was 22.4%, 370 basis points worse than the prior-year quarter. Net margin was 11.1%, 480 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $531 million. On the bottom line, the average EPS estimate is $0.27.

Next year's average estimate for revenue is $2.1 billion. The average EPS estimate is $1.05.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 638 members out of 683 rating the stock outperform, and 45 members rating it underperform. Among 169 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 162 give International Game Technology a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on International Game Technology is outperform, with an average price target of $20.17.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of International Game Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement