Slot-maker Bally reports record revenue for fourth straight quarter

Vegas Inc. coverage

Las Vegas-based slot machine manufacturer Bally Technologies reported record gaming operations revenue for the fourth straight quarter, propelling the company to earnings that outpaced analysts’ expectations.

Bally, the second-largest domestic slot maker in the United States, reported earnings of $24.3 million — 54 cents a share — on revenue of $210.5 million for the company’s second quarter that ended Dec. 31.

That compared with earnings of $27.3 million — 49 cents a share — on revenue of $182.7 million for the same quarter the previous year.

Earnings per share were higher thanks to a stock repurchasing program. A survey of 14 analysts had projected earnings of 51 cents.

The company had more sales with higher prices for the quarter compared to a year ago, and it had more premium games — linked progressive systems, rental and daily-fee games, and lottery systems — at more sites than the year-ago quarter.

Bally reported 3,636 slot machine sales at an average unit cost of $17,201 — 12.8 percent more in sales and price from a year earlier. The company now has 406,000 slot units at 631 sites, compared with 392,000 at 609 locations at the end of 2010.

“Significant investments in game development studios over the past few years are now producing good results,” Bally CEO Richard Haddrill said in a conference call with analysts Wednesday.

Gaming operations revenue was paced by premium games like “Cash Wizard” and “Vegas Hits.”

Bally capitalized on sales to Revel Atlantic City, where the company will have a 20 percent share of machines on the floor when the casino opens in May, and at the recently opened Resorts World Casino New York.

International sales continued to be a bright spot for the company, which has plans for sales and installations in South Africa, New Zealand and Canada later this year.

New-unit sales to international customers represented 25 percent of the company’s second-quarter shipments.

Bally cut research and development expenses from 12 percent of total revenue to 11 percent during the quarter as product acceptance increased among the company’s customer base.

The company’s systems division also performed well during the quarter with revenue increasing 16 percent to $54 million, compared with $46 million a year earlier.

Maintenance revenue increased to a record $18 million for the quarter, compared with $16 million a year earlier.

Bally also will be part of an effort by the Pechanga Resort and Casino, a tribal property in Temecula, Calif., to stage the world’s largest slot machine tournament on Feb. 11. The Bally system will enable the casino to convert more than 1,000 slot machines to a networked tournament-play mode so that players can compete head to head in a bid to be listed in the Guinness “Book of World Records.”

Gaming

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