International Game Technology’s Q3 financial results for the period ended September 30, 2019 have been published this week. On a positive note, the firm reported consolidated revenue of $1.15bn, up 3% at constant currency and a sharp growth in global gaming product sales.
But less pleasing was a 19% fall in operating income to $154m at constant currency; with those adjusted figures showing a fall of 11% to $221m.
“Our core businesses achieved significant momentum in the third quarter and year-to-date periods,” said CEO Marco Sala. “Key performance indicators were solid in the quarter – gaming machine unit shipments increased 44%, while same-store revenue for draw games and instants rose 4%. Our leading positions are rooted in our focus on player-driven performance, which was on display at recent lottery and gaming trade shows and should sustain our momentum going forward.”
“IGT has generated free cash flow in excess of $450m in the first nine months,” said CFO Alberto Fornaro, CFO of IGT. “This confirms the inflection we expected to achieve this year. We are well positioned to achieve our 2019 strategic and financial goals.”
Elsewhere in the consolidated results, adjusted EBITDA declined 5% at constant currency to $407m, while net income was $104m. When adjusted, net income was $43m, down from $64m year-on-year. Net debt of $7.35bn, was down 5% from $7.76bn at December 31, 2018
Focusing on the North America Gaming & Interactive business, IGT reported product sales revenue of $107m, up 36% over the prior year. Terminal product sales rose 37% and there was a significant increase in replacement units.
Gaming service revenue of $146m declined from $152m in the prior-year period, while other service revenue was driven by contributions from sports betting. Operating income of $62m was up 38% compared to the prior year.
North America Lottery business brought in revenue of $281m, described by the firm as essentially in line with the prior year. Lottery service revenue was $215m, compared to $225m year-on-year, with lottery product sales revenue up on strong demand for self-service vending machines.