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US – IGT reports ‘dynamic’ start to 2017

By - 26 May 2017

International Game Technology described the first quarter of 2017 as being ‘dynamic’ despite consolidated revenue dropping to $1,153m from $1,282m in the first quarter of 2016.

The gaming giant said the decline in revenue reflected comparisons with the high jackpot levels of the prior year, new Italy Lotto concession dynamics, and lower gaming product sales.

“The first quarter of 2017 has been a dynamic period for us,” said Marco Sala, CEO of IGT. “Our revenue and profit are consistent with the pattern of the year that we described in March. Year to date, we’ve strengthened our leading positions in global lotteries and begun the rollout of a new generation of gaming machines. We are monetizing non-core assets that will allow us to significantly reduce debt, and we are adopting a new business model for our future participation in the social casino space.”

“As we noted in March, a unique combination of elements affected first quarter revenue and profit comparisons, including record jackpot activity in 2016,” said Alberto Fornaro, CFO of IGT. “Disciplined asset and operational management are a top priority for the Company, and this is evident in the strong first quarter cash flow. We are updating our outlook to incorporate the DoubleDown transaction and the impact of increased taxation on gaming machines in Italy.”

Global lottery same-store revenue, excluding Italy, declined 11 per cent in the first quarter, following record jackpot activity in North America and the United Kingdom during the prior-year period. Excluding multi-state jackpot games, global lottery same-store revenue grew nearly two per cent. Italy lottery wagers decreased two per cent due to higher late numbers activity in the first quarter of 2016.
Gaming service revenue was impacted by lower DoubleDown revenue, and gaming product sales were down due to large system and software sales in the first quarter of 2016. The Company shipped 5,953 gaming machines worldwide during the first quarter, and the global installed base rose to 59,034.

Revenue for North America Gaming & Interactive was $305m compared to $339m in the first quarter of 2016. Product sales were $71m compared to $81m in the first quarter of 2016, which benefitted from a large system sale. The segment shipped 3,944 gaming machine units in the quarter compared to 3,951 units in the prior-year period.

Operating income for North America Gaming & Interactive was $66m compared to $89m in the first quarter of 2016. The decline is primarily due to lower revenues, increased depreciation on investments in the installed base, and higher jackpot expense.

International revenue was $164m compared to $185m in the first quarter of 2016. On a constant currency basis, International revenue declined nine per cent.

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