Why International Game Technology Tanked This Morning

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of gaming equipment company International Game Technology (NYSE: IGT  ) plunged 11% this morning after its quarterly results and outlook disappointed Wall Street.

So what: The stock has slumped over the past six months on signs of slowing growth, and today's Q1 results -- EPS of $0.25 missed Wall Street's estimates by $0.05 on a top-line increase of just 2% -- coupled with downbeat guidance only reinforce that trend. In fact, gross margin fell 200 basis points over the year-ago period to 61%, suggesting that IGT's competitive position is getting more expensive to maintain.

Now what: Management now expects 2014 adjusted EPS to come in at the low end of its guidance range of $1.28 to $1.38. "In our fiscal first quarter we expanded revenue while maintaining strong operating income and cash flows despite market challenges," CEO Patti Hart reassured investors. "We remain confident that our focus on content, distribution and maximizing shareholder value while improving efficiencies will position us for success in fiscal 2014." More important, with the stock now off about 30% from its 52-week highs and trading at a forward P/E of 10, Fools are getting a seemingly attractive price to bet on that bullishness.

More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


Read/Post Comments (0) | Recommend This Article (2)

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.

DocumentId: 2808259, ~/Articles/ArticleHandler.aspx, 4/20/2014 10:49:17 AM

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...


Advertisement