Thursday, International Game Technology (IGT) reported a first quarter profit that increased from last year, despite a drop in revenue, helped by cost cutting measures, which reduced operating expenses by around $125 million, and the absence of a $17.4 million restructuring charge.
The Reno, Nevada-based electronic gaming equipment maker's first-quarter net income increased to $73.3 million or $0.25 per share from $61.2 million or $0.21 per share a year ago.
On average, 18 analysts polled by Thomson Reuters estimated earnings of $0.20 per share for the quarter. Analysts' estimates typically exclude special items.
The company had several items affecting comparability, with favorable items of $0.03 million for the first quarter of 2010, compared to unfavorable items of $22.1 million in the first quarter of 2009. Items that affected comparability includes the impact of interest rate changes on jackpot liabilities, fixed asset charges of technological obsolescence, inventory write-downs of technological obsolescence, foreign currency loss, and bad debt provision.
Total non-GAAP items amounted to $0.01 per share favorable impact in the first quarter of 2010, compared to $0.07 of unfavorable impact in the first quarter of 2009.
Consolidated revenues for the first quarter decreased to $515.7 million from $601.6 million in the same quarter last year. Analysts expected revenues of $529.57 million for the quarter. Revenue from gaming operations consisted of 54% of sales whereas product sales accounted for 46% of sales. Revenue comparisons to last year were impacted by an extra week in the prior year quarter, which contributed $22.4 million to revenues.
In the preceding fourth quarter, the company reported a net loss of $21.3 million or $0.07 per share, compared to net income of $52.1 million or $0.18 per share in the year-ago quarter. Total revenues for the quarter decreased to $514.6 million from $632.2 million in the prior-year quarter.
For the quarter under review, segment wise revenue from gaming operations decreased to $277.3 million from $313.3 million in the year-earlier quarter. The decline was primarily due to lower play levels and continued shifts in installed base mix to include more lower-yielding lease machines. Revenue from product sales dropped to $238.4 million from $288.3 million in the first quarter of 2009.
Consolidated gross profit for the first quarter slid to $296.6 million from $305.9 million in the similar quarter of 2009. Operating income for the quarter increased to $140.3 million from $100.1 million in the comparable quarter last year, as total costs and operating expenses fell to $375.4 million from $501.5 million.
The decline in operating expenses was due to the absence of restructuring charges in the quarter under review, as well as drop in cost of gaming operations, which decreased to $104.1 million from $151.9 million; lower cost of product sales, which dipped to $115.0 million from $143.8 million; decrease in selling, general, and administrative expenses, which slid to $90.0 million from $114.9 million; and reduced research and development expenses, which eased to $46.7 million from $53.5 million.
Excluding restructuring costs and the extra week in the prior year quarter, operating expenses decreased primarily due to cost reduction efforts, reduced bad debt provisions, and lower legal and compliance fees.
Commenting on the results, Patti Hart, chief executive officer of the company, said, "Our first quarter results reflect measured progress in numerous aspects of our business, despite continued challenges in the broader marketplace."
Due to retrospective application of new accounting standards adopted at the beginning of fiscal 2010, the company restated its first quarter 2009 results. Net income was adjusted to $61.2 million from $65.7 million reported earlier. Earnings per share was adjusted to $0.21 from the previously-reported of $0.22.
At December 31, 2009, the company had cash and equivalents of $73.0 million, compared to $146.7 million at December 31, 2008.
IGT closed Thursday's regular trading at $20.20, up $0.11 or 0.54%, on a volume of 3.98 million shares on the New York Stock Exchange. In after hours, the stock gained $1.01 or 5%.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.