Why International Game Technology 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 plunged more than 10% during intraday trading Thursday after the Vegas-based gaming-machine maker reported disappointing quarterly results.
So what: Quarterly revenue came in flat from the same year-ago period, at $632.3 million, which translated to a 22% decrease in adjusted net income, to $0.30 per share. Analysts, by contrast, were looking for adjusted earnings of $0.34 per share on just $598.52 million in sales.
In addition, International Game Technology provided fiscal 2014 adjusted earnings guidance of $1.28 to $1.38 per share, the mid-point of which is slightly below analysts' expectations for adjusted 2014 earnings of $1.34 per share.
Now what: I don't think IGT's quarter was particularly bad, especially considering the company pays a solid 2.1% dividend (based on today's levels), and also announced its intention of entering into an accelerated $200 million share repurchase agreement to return additional capital to shareholders in lieu of significant revenue and earnings growth.
As it stands, with shares trading at a reasonable 15 times trailing earnings, and just 12.7 times next year's estimates, I think IGT stock could reward patient shareholders down the road.
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The article Why International Game Technology Shares Plunged originally appeared on Fool.com.
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