International Game Technology reported a 21% increase in corporate profits in the first quarter despite what CEO Patti Hart described as “market challenges” that continue to impact revenues.
Net income for the Reno, Nev.-based slot giant was US$79.2 million for the initial 12 weeks of fiscal 2014, good for 31 cents in earnings per share. But overall revenues were up only 2% to $541.2 million, the smallest increase in the past four quarters.
Revenue from machine sales grew 4% year on year to $243.6 million, of which sales to casinos in the US and Canada increased 7% to $170 million. International sales dipped 3% to $73.6 million. Revenue from operations fell 8% to $223 million.
In a statement, IGT warned investors the company could see reduced profits over the next few quarters if declining gaming revenue trends continue.
“All in, it was a weak quarter and the outlook for the remainder of 2014 appears challenging,” said Las Vegas-based investment analysts Union Gaming Research.
In a note to investors the firm said it expects continued softness in domestic US demand combined with few new openings and new markets to spell fewer new sales opportunities and also will act to depress yields in the gaming operations segment.
“There is a hyper-competitive environment for casino floor space,” the firm said.
Growth in IGT’s interactive segment was the highlight of the quarter, with revenues up 41% to $74.6 million, while social gaming, which includes the company’s popular DoubleDown Casino, increased 57% to $64.8 million. IGT reported more than 1.7 million average daily users for the quarter at DoubleDown, 17% more than in Q1 2013.
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