IGT’s Hart reports ‘muted demand’ in core business

IGT’s Hart reports ‘muted demand’ in core business

Monday, November 10, 2014 Totally Gaming

Patti Hart, chief executive officer of International Game Technology (IGT), has cited on ongoing “muted demand” in the gaming product developer’s core business as one of the main reasons for a slump in revenue during the 12 months through to September 30.

The company posted full-year revenue of around $2.1bn (€1.7bn), a total that is down 12 per cent on the $2.3bn reported at the end of the 2013 financial year.

IGT’s product sales suffered the most with a 25-per-cent drop in revenue while the company's gaming operations arm also experienced a revenue drop of 13 per cent from $312.2m in 2013 to $233.9m this year. However, the IGT interactive business saw revenue jump 19 per cent to $86.7m.

Elsewhere, total operating income dropped 17 per cent to $408.6m while net income also fell by nine per cent to $247.9m. In addition, net operating cash flows plummeted by 57 per cent from $462.6m at the end of 2013 to $199.2m this year.

In addition to full-year losses, IGT also suffered disappointing revenue performance in the fourth quarter with total revenue in the period down 15 per cent to $536.5m. However, quarterly operating income remained flat at $123.3m while net income jumped by 12 per cent to $70.9m.

Reflecting on the full-year and quarterly figures, Hart said that despite a lack of demand in its core business, IGT is starting to see the impact of various cost-saving actions implemented earlier this year.

“Our focus on profitability resulted in significant improvements in our gross margins for the year, and in our gross and operating margins for the fourth quarter, in large part due to cost saving actions we took earlier this year,” Hart said.

“While we continue to see muted demand in our core business, our DoubleDown Casino business drove 28 per cent revenue growth for the full year while maintaining industry-leading player monetisation rates and growing daily active users.”

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