IGT Reports Decline in Revenue in Q3 2018
The London-headquartered multinational gaming company International Game Technology (IGT) has posted its results for this year’s third quarter, revealing an interesting period for the renowned firm.
According to available figures, IGT saw an annual drop in revenue but still managed to increase its profit. Such turn of events was hailed by the company’s Chief Executive Officer, Marco Sala.
The three-month period ending on September 30 was concluded with a 4% drop in revenue to $1.16 billion, while a $22 negative impact arising from the company adopting a new accounting standard for reporting revenue generated through customer contracts was cited as the main reason for such a result.
Revenues Dropping Across Its Divisions
IGT’s North American division recorded an annual drop in revenue of 12% to $231 million, while revenue from gaming services and product sales saw a decrease of 11% and 13% respectively. The results of the company’s North American lottery division were pretty much the same, with revenue dropping by 9% on a yearly basis, to a total of $279 million.
The lottery business suffered from the lack of multi-state jackpot activity during this period, while significantly less revenue came from Illinois, where IGT was replaced as the main service provider to the state lottery.
IGT International also saw a decline in revenue during the third quarter of the year, with non-betting revenue making a significant contribution to an annual 5% drop to $216 million. According to available information, such dismal performance was due to a number of factors, including a shift from fewer but higher-cost products on offer.
On the other hand, the company’s division in Italy was the only one to end the quarter with a growth. Its revenue went up by 4% to $430 million, thanks to a rise in lottery and gaming service revenue, as well as in more money being wagered on sports, especially since the quarter includes the final games of this year’s FIFA World Cup.
Profits On The Rise
But there is good news. Although revenue figures weren’t as good as the company had hoped they would be, IGT still managed to record growth in profit, while EBITDA rising to $443 million. Operating profit reached $200 million, while the expenses in Q3 were down by a staggering 86% to $996 million. Cost of services was also down by 6% in this quarter, while the cost of product sales went down by nearly a third.
All in all, IGT ended this three-month period with a post-tax profit of $22 million!
Commenting on the posted results, IGT Chief Executive Officer Marco Sala said solid performance and important, long-term contracts had driven very good third quarter and year-to-date results, and added global lottery same-store revenue for instants and draw games had risen mid-single digits.
Sala noted the installed base of gaming machines had been up, and unit shipments of gaming machines had increased by 10%.
He pointed out the company had enjoyed strong sales and profit growth in Italy, confirming the vitality of that important market. Sala concluded by confirming that IGT was firmly on track to achieve its 2018 financial and operational goals.