Why International Game Technology's Shares Plunged
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of International Game Technology (NYS: IGT) fell 20% today after the company reported disappointing earnings.
So what: During the third fiscal quarter, revenue grew 9% to $533 million, and adjusted earnings per share fell 12% to $0.23. Both figures were below estimates, and the EPS number was well below the $0.29 analysts had expected.
Now what: The major concern in gaming right now is that a slowdown in China will affect growth in not only Macau, but also other parts of Asia. Still, revenue did grow 9%, and the stock's trailing P/E multiple is now 13, a reasonable value for a company that is still growing. I think the stock may see some more pressure in the short term, but long-term, gaming is expanding and revenue should continue to grow.
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The article Why International Game Technology's Shares Plunged originally appeared on Fool.com.Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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.