International Game Technology (NYSE:IGT) started 2004 on an impressive note. Yesterday, the slot machine maker reported strong results driven by international sales and ramping demand for its revenue-generating, cost-saving coinless slot machines.

For the first quarter, sales jumped 24% year over year to a record $608.1 million. Meanwhile, earnings from continuing operations jumped 38% on a per-share basis to $0.33, beating analysts' estimate of $0.29. IGT also booked a $59.7 million, or $0.17 per-share, gain from the sale of its online lottery systems business to Scientific Games (NASDAQ:SGMS) this past fall.

Worldwide, machine sales jumped 55% over last year's quarter to 46,100 units. Most notably, international sales made up over half of unit sales, soaring 125% to 23,500 units on the strength of record sales to casinos in Japan and Europe.

Replacement sales, driven by demand for coinless slots, grew 48% to 16,400 units. Both Harrah's Entertainment (NYSE:HET) and Las Vegas casino operator Station Casinos (NYSE:STN) recently placed large orders.

The company also announced a deal with Michael Gaughan's Coast Casinos to equip Southcoast Casino, slated to open late next year on a site past Mandalay Resort Group's (NYSE:MBG) Mandalay Bay at the south end of the Strip. IGT will supply all of the casino's 2,500 slots.

CFO Maureen Mullarkey affirmed that the company is on track to sell 60,000 to 65,000 replacement units in fiscal 2004. She also expressed comfort with the average analyst estimate of $1.28 for the year, and that gross margins would remain at 50% over the year's final three quarters.

IGT is flat-out the dominant player in an industry with strong growth prospects. It's a company I would certainly consider paying fair value for. That said, IGT shares look fully valued here at around $37, or just under 30 times 2004 earnings.

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