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RENO — International Game Technology said Thursday its third-quarter earnings fell 39 percent as the recession continued to stifle product demand in the casino industry, but the performance still beat Wall Street's expectations and gave shares a big boost.
The Reno-based manufacturer of slot machines and casino management systems said net income for the quarter ended June 30 was $66.3 million, or 22 cents per share, compared with $108.3 million, or 35 cents per share, in the same period in 2008.
Revenue fell 23 percent to $522.1 million from $677.4 million a year earlier.
Analysts polled by Thomson Reuters had anticipated earnings of 18 cents per share on revenue of $511 million, and Wall Street reacted favorably to the report.
IGT shares climbed $2.27, or nearly 13 percent, to $19.76 Thursday.
"Last quarter we conveyed to you our beliefs that our business had reached a trough in the midst of very difficult markets," IGT Chief Executive Patti Hart said in a conference call with analysts. "Today, I would like to reiterate this view."
Hart said the company shipped 2,300 replacement units to North America markets in the April-June period, a 28 percent increase over the prior quarter.
"Those operators who are able to allocate capital are doing so at a higher yet measured rate, striking a balance between conservative capital deployment and the recognition that their slot products are in need of refreshment," she said.
The company said new and expansion shipments totaled 4,700 units. While that's down 3,900 units from the prior year, IGT said the 2008 third quarter set a record for units shipped to expansion properties.
IGT's results "suggest stability in the gaming equipment sector," Bill Lerner, an analyst with Union Gaming Group, said in a note to clients.
Over the past eight months, IGT has made a series of job cuts. Earlier this month the company said it was laying off 55 workers at its Reno headquarters, about one-third of the 161 layoffs it previously announced for its domestic and international work force.
IGT also cut 300 jobs in Reno and 500 globally in November. In January it cut 200 more positions, mostly in Reno.
Hart, who took over as CEO in April, said the company continues to evaluate its operations for improved cost efficiency, adding that there are "no sacred cows."
"The reality is that our organization has grown much more complex," Hart said. She added that while market complexities are a fact of life, "IGT-induced complexity is not."
