VEGAS INC coverage
Casino supplier International Game Technology on Tuesday said its investment in interactive gaming helped boost revenue in the fiscal second quarter ended March 31.
IGT, based in Las Vegas and Reno, said revenue increased 13 percent to $541 million on a year-over-year basis, in part because of its $255 million purchase in January of Double Down Interactive LLC, a Seattle online social gaming company.
The unit’s DoubleDown Casino on Facebook increased its user base by 24 percent in the quarter to 5.6 million people, IGT said.
That’s an indication of strong interest in what could be a platform for online gambling should it be legalized in the United States.
IGT committed $255 million in cash up front for Double down, but the deal may end up costing it $505 million for employee retention and performance payments over three years.
Despite the revenue improvement, IGT’s quarterly profit fell.
The company posted a profit of $61.9 million, or 21 cents per share, down from $69.6 million, or 23 cents, in the year-ago quarter.
Factoring out certain nonrecurring acquisition costs and other one-time expenses, the company said, operating income grew 10 percent to $144.2 million. Operating income includes operating expenses but doesn’t include interest and tax expenses or one-time items.
Besides the extra interactive revenue, IGT said, gaming operations revenue increased, thanks to an increase in the number of slot machines and other gaming devices it leases to casinos.
Its installed base of devices at the end of the quarter was 56,100 machines worldwide, up 7 percent.
In all, lease and interactive revenue grew 11 percent to $300.4 million in the quarter.
Product sales increased 16 percent to nearly $241 million, the company said.
“Our financial results are strengthening as we move through the fiscal year — evidenced by our growth in both revenues and earnings in our second quarter,” IGT CEO Patti Hart said in a statement. “Every aspect of our business is providing a meaningful contribution to our strong financial performance.”