Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

5

North America Sales Are Bally Tech's Lemons

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

The slot machines are still jingling, but there are fewer coming off the production line these days at Bally Technologies (NYSE: BYI  ) . An explosion of new casinos last year has been exhausted, leaving little new business for this year. Combine that with a slow replacement cycle for jittery U.S. casinos and you have weak gaming equipment sales.

International sales helped keep equipment from falling too far. Total units were down to 3,830 this quarter, from 5,043 last year, but international sales were 1,225 units, up from 1,042 last year. Clearly, overseas is the place to be right now. Despite the drop in unit sales, revenue was helped by an average sales price that increased 8% to $15,328, an incremental positive.

Results were better in gaming operations and systems. Gaming operations increased sales to $77 million from $71 million a year ago while maintaining an impressive 70% margin. Systems revenue increased $7 million to $54 million this quarter while improving gross margin to 74% in Q4.

Bally's unit trends were similar to trends at International Game Technology (NYSE: IGT  ) , but the other big competitor in the industry is taking share. WMS Industries (NYSE: WMS  ) increased unit sales 2% this quarter in spite of weak North American conditions.

Bally talks a lot about the R&D investment it's making and the innovative products it's producing. As casinos start replacing old slots, it's time to drive the money it's spending on R&D to new sales -- something Bally didn't do this quarter. I don't see a reason to get excited about this quarter. Gaming equipment has a large potential upside, but WMS Industries may take more advantage of that than Bally Technologies.

More on gaming:

Fool contributor Travis Hoium does not have a position in any company mentioned in this article. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1269505, ~/Articles/ArticleHandler.aspx, 8/29/2015 9:41:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Travis Hoium
TMFFlushDraw

Travis Hoium has been writing for fool.com since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
BYI $0.00 Down +0.00 +0.00%
Bally Technologies… CAPS Rating: ****
IGT $16.99 Up +0.23 +1.37%
International Game… CAPS Rating: ****
WMS.DL $25.29 Up +0.25 +0.00%
WMS Industries, In… CAPS Rating: ***