IGT beats Wall Street estimates with Q2 2017 net revenue

rnational Game Technology has reported strong growth in its gaming and lottery segments in the second quarter of 2017, beating Wall Street analyst estimates.

The firm reported Q2 net revenues of $1.22bn, roughly 3% ahead of the Wall Street’s general estimates, and adjusted EBITDA of $424m which was 9% above the US financial centres consensus.

Adjusted EBITDA decreased from the $443m reported in the second quarter of 2016, primarily as a result of the sale of its DoubleDown subsidiary, in addition to the final $185m upfront instalment payment for its new lottery concession in Italy.

Sales rose by 2,701 units from the prior-year period while global gaming product revenue increased 5% over the second quarter of 2016. This rise was driven by a 25% growth in terminal sales that was partially offset by lower systems sales.

North American gaming and interactive revenues decreased from $350m in the second quarter of 2016 to $310m in the same period of 2017, largely due to the sale of DoubleDown.

In a statement accompanying the results, IGT CEO Marco Sala comments:"Our second quarter results reflect strong key performance indicators for both our global Lottery and Gaming businesses.

"Lottery growth is benefiting from innovation and effective sales and product marketing initiatives. In Gaming, the global installed base was up and unit sales of gaming machines were higher, as were average selling prices, all supported by strong demand for new cabinets.

"Overall, we are pleased with the results of the first half, and we expect a more robust product offer to support stronger sales and profit levels in the second half of the year."

Second quarter operating income rose to $192m, compared to $171m in the second quarter of 2016, however adjusted operating income decreased to $264m compared to $290m in the prior-year period.

Alberto Fornaro, CFO of IGT added:"We've made a lot of good progress on many levels so far this year. We are lowering our debt and we are enhancing cash generation through disciplined asset and financial management. We are maintaining our outlook for adjusted EBITDA and net debt for the year, and have modestly reduced capital expenditures to account for certain timing shifts."