International Game Technology (NYSE:IGT) shares continued their rapid rebound, jumping 9% yesterday to a new 52-week high at $38.14 following the company's second-quarter earnings report. The leading slot manufacturer beat analyst earnings estimates for a second straight quarter, as earnings per share climbed 35% to $0.35 (for a total $124 million), topping analysts' expectations of $0.31 per share.

Even better, the company upped its earnings guidance for the next two quarters -- "and for some if not all quarters in the year 2007" -- to between $0.30 and $0.35 per share per quarter, including $0.07 to $0.08 per share of stock options expense. That compares favorably to previous EPS guidance of $0.30 per share excluding stock option expense.

Overall revenues climbed 17%, to a record $644.4 million. Product sales jumped 32%, to $333.2 million. International sales rose 93%, to $131.9 million, thanks largely to sales to Japan. Meanwhile, gaming operations revenue inched up 4% to $311.2 million, as the installed base of recurring-revenue machines at the end of the quarter was 44,400 units, up 6,500 units over the previous year.

Among other highlights:

  1. Gross margins on gaming ops came in at 59%, up from 49% a year ago. Last year's figure was impaired by a $19.9 million "obsolescence charge." The company expects this figure to trend in the 57% range.

  2. Revenue per day per machine dropped to $78 from $88 in last year's quarter, because of an increase in lease operations games. However, these games also carry higher margins. The company expects this figure to continue in the $76 to $78 range through the rest of the year.

  3. Among sales to new properties this year, IGT claimed a 100% share of the 2,100 units installed at Boyd Gaming's (NYSE:BYD) South Coast Hotel and Casino in Las Vegas; an 80% share at Station Casinos' (NYSE:STN) recently opened Red Rock Station in Las Vegas; a 55% share at the Imperial Palace along the Mississippi Gulf Coast; and a 71% share at the New Palace nearby.

  4. The company bought back 2.8 million shares at a cost of $100 million, or $35.89 per share. The company had previously set a $100-million-per-quarter goal for share buybacks, but with the rising stock price -- the stock was in the mid-$20 range as recently as November -- the value gained from the buybacks is diminishing. Recall that the company only spent $73.1 million on buybacks last quarter. It would have been nice for IGT to have purchased more stock at earlier, cheaper prices.

Overall, IGT enjoyed a healthy quarter, and the long-run picture hasn't changed. That said, the stock hasn't gotten any less pricey; it remains a hold in my book.

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Fool contributor Jeff Hwang owns shares of International Game Technology. The Fool's disclosure policy always pays off.