IGT Posts Second-Quarter Loss But Beats Analyst Estimates

IGT Posts Second-Quarter Loss But Beats Analyst Estimates

International Game Technology had a second-quarter loss, but topped analysts’ estimates with revenue at $637 million as the company pointed to the strong performance of its North American lottery sector.

Tuesday’s earnings report came a day after IGT and FanDuel announced an expansion of their partnership. The new agreement, which runs through September 2024, allows IGT’s PlayDigital's PlayCasino games — slots, blackjack, roulette and others — to reach the entire U.S. market and includes using the IGT platform in FanDuel’s sportsbooks.

The Q2 revenue figure, which was better than analysts’ estimate of $482.25 million, was still down year-over-year by 72%, the company said, reflecting the effect of global coronavirus restrictions. It said revenue from digital activities increased 35%, however.

"Our second quarter results reflect the intense impact of global lockdowns caused by the pandemic," Marco Sala, CEO of IGT, said in a news release. "That said, thanks to strong North America Lottery performance and our swift adoption of cost-saving and avoidance measures, we delivered better cash flow than we expected back in May. Our resilience is a direct consequence of the diversity of our global portfolio of products and solutions.

"The improving trends we are currently seeing are encouraging, but we remain prudent with our planning."

IGT is the largest business-to-business gaming company in the world. Based in London, the gaming provider has about 12,000 employees worldwide and a presence in more than 100 countries.

IGT Q2 By The Numbers

The company said Tuesday it was on track to achieve $500 million in 2020 cost reduction/avoidance, and has identified more than $200 million in longer-term cost savings. Other key numbers in the earnings report, according to the news release:

  • The second quarter earnings per share of $0.59 was $0.11 better than analyst estimates.
  • Liquidity and net debt improved on positive cash flow performance, generating $168 million in cash from operating activities and $107 million in free cash flow during the second quarter.
  • The net loss was $280 million with an adjusted net loss of $121 million.
  • The company delivered $168 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) because of “strict cost discipline.”

Max Chiara, CFO of IGT, said cash generation and liquidity remain the company’s top financial priority.

"The proactive efficiency initiatives and focused capital markets activity we executed in the quarter have us tracking ahead of plan on all key measures and we expect to deliver positive free cash flow this fiscal year,” Chiara said in the news release. “We have the resources we need to navigate the impact COVID-19 is having on our business and we are making important, strategic decisions to enhance our operational flexibility."

IGT Eye Toward The Future

IGT said gaming and lottery trends improved each month as facilities began to reopen and global restrictions were eased.

And now IGT, which is traded on NYSE, can point to the FanDuel deal for continued growth. Its shares ended up about 7% in trading Monday, but they were down slightly in early trading Tuesday.

"IGT and FanDuel Group are positioned for continued success in the U.S. and we are committed to fueling FanDuel Sportsbooks' sustained growth through our proven, market-ready platform, player-preferred game content and self-service betting technologies." Enrico Drago, IGT PlayDigital’s senior vice president, said Monday in the news release announcing the FanDuel agreement.

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