The decline in year-over-year revenue and gross profits on gaming operations announced yesterday by International Game Technology (IGT) was attributed to lower play levels largely because of unfavourable economic conditions combined with continued shifts in the installed base mix toward lower-yielding stand alone, lease and central determination games. Gaming operations revenue declined 6% in the first quarter to 31 December 2008, gross profit declined by 19%.
Product sales were similarly affected with a 22% reduction in worldwide machine shipments, an 8% revenue decline and a 14% gross profit decline. Lower international revenue was partially offset by a 29% revenue rise in North America from new and expanding markets. The 42% drop in quarterly profits has meant that IGT has lowered its fiscal 2009 earnings outlook, causing shares to fall in early trading.
Chairman and CEO TJ Matthews commented: "Our first quarter results reflect the on-going effects of difficult economic conditions worldwide that have impacted both gaming operators and casino patrons. Although we expect to continue to face a challenging global market environment in the near-term, we remain focused on IGT's long term objectives.”
He added, “During the quarter we filled key strategic roles, implemented cost rationalization initiatives and completed the upgrade of our entire line of machine products headlined by our innovative Multi- Layer Display (MLD) technology and REELdepth games."
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