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Tough Q2 for IGT

To its competition, IGT must seem nigh untouchable. The world-famous maker of slot machine games is completely dominant in the industry. As a company, it is bigger, richer, and possessed of many more assets than even its closest competition, and all the major names in casino gambling have accounts with the maker. IGT’s recently-revealed second quarter profits for the fiscal year are indicative, however, of the old adage that a little rain must fall into even the most charmed of lives. IGT’s profits tumbled a shocking forty-four percent between January and March 2009. As a result, the company has been forced to reevaluate and cut its expectations for performance through the rest of the year.

With proceeds continuing their dismal descent in Las Vegas and Atlantic City, IGT management said they knew that the company was in for a rough trough quarter. Gamblers aren’t spending money in the big playing hubs, so casino don’t have the money to expand and/or rotate out older game terminals. It’s a cruel domino effect, and one that is also hitting IGT’s two primary competitors - Bally Technologies Inc. and WMS Industries Inc. – hard.

IGT CEO Patti Hart pointed to the fact that IGT leads the casino slot machine market in new machine purchases, but that, for some reason, they are lacking in terms of persuading casino officials to use their machines to replace outmoded models. Consequently, Hart said, the company will turn a great deal of attention to R&D investment, to ensure those monies are “flowing through the revenue producing products at the appropriate rate.”

Back to April 2009 Archive.