Slot-machine king International Game Technology (NYSE:IGT) posted quarterly earnings on par with estimates, but a weak outlook has the company's shares down 9.3% to $30.43 in midday trading.

For the first quarter, IGT saw revenues climb 5.4% from last year's first quarter, to $641.2 million. Meanwhile, income from continuing operations grew 4.9% to $122.4 million, meeting the analysts' estimate. It should be noted that last year's quarter included an extra week, which the company said had about a $19.9 million effect on gambling operations.

Domestic slots sales slowed down, but strong international sales picked up the slack. While worldwide product sales increased 7% from the year-ago quarter to $354.3 million, revenues from slots sales in North America fell 23.1% to $182.1 million, as units shipped fell by 35% to 14,700 units. But international product revenues were the big winner for IGT, jumping 84% to $172.2 million, thanks to strong game sales in Japan. Similarly, units shipped internationally climbed 72.7% to 40,600, led by the 29,600 Terminator games sold in Japan.

As a result of the strength in the lower-margin international units, gross margins on slot sales fell from 50% to 46%.

Though the company backed its 15% five-year annual earnings growth target, IGT CEO T.J. Matthews said on a conference call that the company wouldn't meet the target this year. The company now expects second-quarter earnings to come in the low range of its previous guidance of $0.30 to $0.35 per share, and third- and fourth-quarter earnings to fall in the upper end of that same range. Factoring in this first quarter's $0.35 in EPS means that IGT's full-year earnings will probably fall well short of the $1.52-per-share current analyst consensus.

It's worth noting that the company didn't repurchase any shares during the quarter, leaving it with 35.8 million shares under its current buyback program. I don't think that's such a big deal, as buying back shares is a waste of capital if the stock isn't cheap. And -- you guessed it -- I don't think IGT's stock is terribly cheap.

But the company still represents the safest play among the slots makers traded in the United States, a group that includes WMS Industries (NYSE:WMS), Alliance Gaming (NYSE:AGI), and Multimedia Games (NASDAQ:MGAM). Pure value investors would ignore IGT at 22 times this year's earnings, but I think it is a worthy "hold."

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Fool contributor Jeff Hwang owns shares of International Game Technology.