Computerized gaming machines maker International Game Technology (IGT) on Wednesday revealed that it expects to report fourth quarter charges following a review of several of its strategic investments and partnerships.
The company is scheduled to report financial results for the fourth quarter and for the full year 2009 on November 5, 2009.
Meanwhile, the Reno, Nevada-based company also conducted an assessment of its long term strategic goals, including increased focus on gaming content and efficient use of capital resources.
IGT anticipates the non-cash charges to collectively total about $77 million, net of tax, or about $0.26 per share for the fourth quarter. The charges include a non-cash charge of about $78 million, reflecting a reduction in the carrying value of IGT's investment in Walker Digital Gaming, Inc. The company had earlier disclosed the restructuring of its relationship with Walker Digital under an August 2009 agreement.
The anticipated fourth quarter charges also include an expected non-cash charge of about $13 million related to IGT's investment in Las Vegas Gaming International, reflecting the devaluation due to the uncertainty of Las Vegas Gaming's ability to continue operating as a going concern. Further, the charges include about $15 million of additional tax provisions of related to the establishment of a valuation allowance against foreign deferred tax assets which will not likely be realized.
Earlier in the month, IGT and AC Coin & Slot announced a restructuring of the companies' long-standing relationship. Under a new agreement, IGT purchased the distributorship for new IGT machine sales to casino customers in Atlantic City and the Caribbean from AC Coin & Slot for $20.6 million, including $10.6 million in cash consideration. Also, IGT and AC Coin & Slot have amended the terms of the AC Coin & Slot proprietary game agreement.
In its latest quarterly results, IGT reported in July a decline in profit for the third-quarter, reflecting suppressed demand, amid difficult global economic conditions. Net income decreased to $66.3 million or $0.22 per share from $108.3 million or $0.35 per share in the prior-year quarter. Quarterly revenues decreased to $287.9 million from $333.6 million in the year-ago quarter.
While the company reports fourth quarter results on November 5, On average, 18 analysts surveyed by Thomson Reuters currently expect the company to post earnings of $0.17 per share for the quarter, with estimates ranging between $0.14 and $0.27 per share. Analysts' estimates typically exclude special items. Revenues for the quarter are estimated to be $496.71 million. In the same quarter a year ago, the company had recorded net income of $52.10 million or $0.18 per share on quarterly net revenues of $632.20 million.
Analysts are also currently looking for full year 2009 earnings of $0.75 per share, with estimates ranging between $0.72 and $0.85 per share. Revenues for fiscal 2009 are anticipated by analysts' at $2.10 billion. Last fiscal year, IGT reported net income of $342.50 million or $1.11 per share on full year 2008 net revenues of $2.53 billion.
On Tuesday, IGT revealed that it is "Taking Gaming to the Next Level" at the 2009 Global Gaming Expo, November 17-19 at the Las Vegas Convention Center.
In a statement, executive vice president of sales and marketing, Eric Tom said, "High-energy entertainment for the player. Affordable solutions to differentiate your property. The right products and systems to give players the experiences they want and the profits casinos need. IGT is taking gaming to the next level. This year's IGT showing at G2E will absolutely prove that we're the industry leader, now and for the future. We're giving casinos the tools to provide players newfound, valuable experiences. Experiences that will change the industry and once again, set standards brought forth by IGT. IGT has pushed way beyond expectations, and has taken it to a whole new level of excellence."
IGT closed Tuesday's regular trading session at $21.60, up $0.23 on a volume of 2.52 million shares, lower than the three-month average volume of 5.02 million shares. In the past 52-week period, the stock has been trading in a range of $6.81 to $23.30.
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