Scientific Games Corp Earnings Cheat Sheet: Back to the Black

Scientific Games Corp (NASDAQ:SGMS) climbed to a profit in the second quarter and beat Wall Street’s expectations in the process. Scientific Games Corporation is a supplier of technology-based products, systems and services to gaming markets worldwide. It also gain access to technology and pursue global expansion through strategic joint ventures and minority investments.

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Scientific Games Earnings Cheat Sheet for the Second Quarter

Results: Swung to a profit of $7 million (8 cents per diluted share) in the quarter. Scientific Games Corp had a net loss of $4.3 million or a loss 5 cents per share in the year earlier quarter.

Revenue: Fell 5.5% to $220.2 million from the year earlier quarter.

Actual vs. Wall St. Expectations: SGMS beat the mean analyst estimate of 4 cents per share. It beat the average revenue estimate of $210.7 million.

Quoting Management: “We are very pleased with our results this quarter and believe our growth in revenue and profits during a period of significant global economic uncertainty reaffirms the resilience of our business,” stated Jeffrey Lipkin, Senior Vice President and Chief Financial Officer. “In addition, our performance reflects the operating leverage inherent in our business model as operating income growth significantly exceeded revenue growth in our Printed Products and Diversified Gaming Groups. While our Lottery Systems Group was impacted by depressed jackpot levels in the U.S., we’re excited that the industry has decided to raise the price of the Powerball game from $1.00 to $2.00. We believe this move will provide players with more exciting jackpots.”

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 9.1% to $196.7 million in the first quarter. The figure fell 8.9% in the fourth quarter of the last fiscal year from the year earlier and dropped 7.6% in the third quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the first quarter, it missed the mark by 11 cents, and in the fourth quarter of the last fiscal year, it fell short by 2 cents.

SGMS’ profit in the latest quarter follows losses in the previous two quarters. The company reported a net loss of $6.9 million in the first quarter and a loss of $158.4 million in the fourth quarter of the last fiscal year.

The company’s cost of sales fell 10.6% from a year earlier to $119 million. Last quarter, cost of sales was 54% or revenue versus 57.1% a year earlier.

Competitors to Watch: International Game Tech. (NYSE:IGT), Multimedia Games, Inc. (NASDAQ:MGAM), Churchill Downs, Inc. (NASDAQ:CHDN), GameTech International (NASDAQ:GMTC), Canterbury Park Holding Corp. (NASDAQ:CPHC), WMS Industries Inc. (NYSE:WMS), Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE), MTR Gaming Group, Inc. (NASDAQ:MNTG), Empire Resorts, Inc. (NASDAQ:NYNY), and Penn National Gaming, Inc (NASDAQ:PENN).

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(Source: Xignite Financials)

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