How the Wheels Came Off International Game Technology's Bus (IGT)

How the Wheels Came Off International Game Technology's Bus

International Game Technology (NYSE: IGT ) reported earnings today. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), International Game Technology missed on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue shrank, and earnings per share shrank significantly.

Margins contracted across the board.

Revenue details
International Game Technology reported revenue of $446 million. The 13 analysts polled by S&P Capital IQ hoped for a top line of $486 million. Sales were 4.2% lower than the prior-year quarter's $465 million

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.17. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.22 per share. GAAP EPS of $0.17 for Q1 were 34% lower than the prior-year quarter's $0.25 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 56.5%, 290 basis points worse than the prior-year quarter. Operating margin was 22.4%, 370 basis points worse than the prior-year quarter. Net margin was 11.1%, 480 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $531 million. On the bottom line, the average EPS estimate is $0.27.

Next year's average estimate for revenue is $2.1 billion. The average EPS estimate is $1.05.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 638 members out of 683 rating the stock outperform, and 45 members rating it underperform. Among 169 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 162 give International Game Technology a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on International Game Technology is outperform, with an average price target of $20.17.

Add International Game Technology to My Watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of International Game Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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 icon found on every comment.