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Trouble at Aristocrat

Australia’s largest slot machine manufacturer is facing serious financial jeopardy. Stockholders in Aristocrat Leisure are bailing on the company left and right, following an announcement Thursday that the cabinet provider was knocking down its annual profits expectation by a dismal forty percent. Analysts began suggesting that shareholders ditch their stock, and fueled a twenty-eight percent plunge in the slot game company’s shares – from five dollars and fifty cent down to three dollars and ninety cents. The dip constituted Aristocrat’s biggest one-day loss in over five years and subtracted over seven hundred ten million dollars from their market value.

Aristocrat, based in Sydney, is the world’s second-largest slot game manufacturer. Earlier in the week, the company announced that it did not anticipate being able to fulfill its original forecast for annual profits (two hundred million dollars). That estimate, made public in July, has now been amended to what Aristocrat considers to be a more-reasonable estimate of one hundred twenty million dollars.

The slot machine manufacturer’s executive chairman cited the worldwide economic downturn and trouble in the Japanese market as reasons for the company’s revision of its estimated profits. David Simpson stated that the company has expected that it would have sold at least forty thousand slot machines so far this year. In fact, the company has only received twenty-five thousand orders. Gaming operators the world over have been detrimentally affected by the global credit freeze, and have been unable to access the funds to finance new casino products. Aristocrat also had to deal with the financial blow of a twenty-two million dollar judgment as the result of losing a class-action lawsuit.

Back to October 2008 Archive.