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Slight earnings increase for Bally Technologies
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LAS VEGAS REVIEW-JOURNAL
Updated: Oct. 29, 2009 | 3:28 p.m.
Bally Technologies met analysts’ expectations in its first quarter, showing a slight increase in earnings even as revenues dropped by double digits because casinos are continuing to hold back on equipment purchases.
Company executives, however, Thursday said Bally plans to double its games portfolio this fiscal year, leading the company to increase its full-year earnings outlook to reflect what it believes will be increased spending by casinos next year.
“While the economy, the consumers and our customers continue to face many challenges that affect demand in our fiscal year, we’re sensing cautious optimism returning to many of our customers,” Bally Chief Executive Officer Richard Haddrill said. “
The Las Vegas-based gambling equipment provider reported it had net income of $30.6 million, or 53 cents per share, in the first quarter ended Sept. 30, up from net income of $30.3 million, or 52 cents a share, a year earlier.
Revenues fell 17.2 percent to $196.5 million from $237.4 million.
Analysts polled by Thomson Reuters expected Bally to earn 53 cents per share on revenues of $208.8 million.
Bally raised its projection for the fiscal year to $2.30 to $2.55 per share, up from its prior view of $2.25 to $2.50 per share.
Fewer casino openings and expansions, combined with a decrease in casinos replacing current equipment, drove sales of gaming equipment down 42.2 percent to $62 million.
Bally shipped 3,936 units during the quarter, 40.3 percent fewer units than the same quarter last year.
Of the 2,418 units shipped in North America, only 87 units were new unit sales, reflecting the “weak North American replacement market as well as the very low level of new property openings and expansions,” Chief Operating Officer Gavin Isaacs said.
The company will have approximately 20 percent of the new slots at the Aria at CityCenter when it opens in December.
In addition to slot machines, Bally sells technology and systems for casino management and slot machine management.
System revenues increased 3.3 percent to $54 million.
The earnings report comes a week after the U.S. Court of Appeals in Washington dismissed a patent lawsuit filed in 2006 against Bally for its wheel-based games by International Game Technology.
Bally’s antitrust lawsuit against IGT is still pending and could go to trial next year.
Company shares closed Thursday at $38.76, up 71 cents, or 1.87 percent on the New York Stock Exchange.
Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.
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