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.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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