Scientific Games Increases Sales but Misses Estimates on Earnings

Scientific Games (NAS: SGMS) reported earnings on Feb. 28. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Scientific Games beat slightly on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP loss per share shrank.

Gross margins were steady, operating margins dropped, and net margins expanded.

Revenue details
Scientific Games booked revenue of $239.1 million. The five analysts polled by S&P Capital IQ predicted revenue of $235.4 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $212.1 million.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at -$0.05. The six earnings estimates compiled by S&P Capital IQ averaged $0.09 per share on the same basis. GAAP EPS were -$0.09 for Q4 versus -$1.74 per share for the prior-year quarter.


Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 43.2%, about the same as the prior-year quarter. Operating margin was 8.4%, 220 basis points worse than the prior-year quarter. Net margin was -3.6%, 7,110 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $227.5 million. On the bottom line, the average EPS estimate is $0.

Next year's average estimate for revenue is $976.1 million. The average EPS estimate is $0.37.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 145 members out of 163 rating the stock outperform, and 18 members rating it underperform. Among 40 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Scientific Games a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Scientific Games is outperform, with an average price target of $12.90.

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At the time this article 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. 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.

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