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Scientific Games (SGMS) Posts Narrower-than-Expected Q4 Loss
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Scientific Games Corp. reported fourth-quarter 2016 loss of 82 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 91 cents but wider than the year-ago quarter loss figure of 48 cents.
Revenues increased 2.1% from the year-ago quarter to $752.2 million, which was better than the Zacks Consensus Estimate of $745 million. The growth was driven by higher services (up 3.1%) and product sales (up 2.3%), which fully offset weak instant games sales (down 1.1%). Unfavorable foreign currency exchange impacted revenues by $12 million.
We note that Scientific Games have outperformed the Zacks Computer Services industry in the last one year. While the stock gained 111%, the industry returned 32.3% in the same time.
Quarter Details
Gaming Segment revenues decreased 1.7% year over year to $460.9 million. The decline was primarily attributed to lower revenues in the gaming operations, machine sales and gaming systems sales, which were down 7.3%, 2.6% and 6.9%, respectively. This was partially offset by 36.6% increase in table products sales. Unfavorable foreign currency exchange impacted revenues by $8 million.
Total installed base of WAP and premium units declined 198 units on a sequential bases. Average daily revenue across the WAP premium and daily fee participation units declined 4% sequentially. During the quarter, the company shipped 9,234 new gaming machines globally. International shipments were up 14% reflecting increases in both replacements and for new casino openings.
Lottery Segment revenues were down 3.9% year over year to $199.7 million. Instant games and services revenues declined 1.1% and 14.5% from the year-ago quarter, partially neutralized by 3.6% increase in product sales. Unfavorable foreign currency exchange impacted revenues by $3 million.
Interactive Group revenues surged 51.9% year over year to $91.6 million driven by robust performance from social gaming and other interactive, which advanced 52% and 51.4%, respectively.
Scientific Games Corp Price, Consensus and EPS Surprise
Attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) remained almost flat at $293.5 million. AEBITDA from the Gaming and Lottery Systems declined 1% and 12.7% to $219.1 million and $79.1 million, respectively. Interactive AEBITDA surged almost 46% to $19.7 million.
Balance Sheet & Cash Flow
Scientific Games exited the quarter with $139.8 million as compared with $120.9 million in the previous quarter. The company’s long-term debt was $8.07 billion compared with $8 billion as of Dec 31, 2015. The company lowered debt by paying down $17 million.
Cash flow from operations was $76.2 million as compared with $150.9 million in the previous quarter.
The Zacks Consensus Estimate for the current year has increased 1.1% for Hasbro in the last seven days. However, for CACI and CGI estimates have remained stable in the same period.
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Scientific Games (SGMS) Posts Narrower-than-Expected Q4 Loss
Scientific Games Corp. reported fourth-quarter 2016 loss of 82 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 91 cents but wider than the year-ago quarter loss figure of 48 cents.
Revenues increased 2.1% from the year-ago quarter to $752.2 million, which was better than the Zacks Consensus Estimate of $745 million. The growth was driven by higher services (up 3.1%) and product sales (up 2.3%), which fully offset weak instant games sales (down 1.1%). Unfavorable foreign currency exchange impacted revenues by $12 million.
We note that Scientific Games have outperformed the Zacks Computer Services industry in the last one year. While the stock gained 111%, the industry returned 32.3% in the same time.
Quarter Details
Gaming Segment revenues decreased 1.7% year over year to $460.9 million. The decline was primarily attributed to lower revenues in the gaming operations, machine sales and gaming systems sales, which were down 7.3%, 2.6% and 6.9%, respectively. This was partially offset by 36.6% increase in table products sales. Unfavorable foreign currency exchange impacted revenues by $8 million.
Total installed base of WAP and premium units declined 198 units on a sequential bases. Average daily revenue across the WAP premium and daily fee participation units declined 4% sequentially. During the quarter, the company shipped 9,234 new gaming machines globally. International shipments were up 14% reflecting increases in both replacements and for new casino openings.
Lottery Segment revenues were down 3.9% year over year to $199.7 million. Instant games and services revenues declined 1.1% and 14.5% from the year-ago quarter, partially neutralized by 3.6% increase in product sales. Unfavorable foreign currency exchange impacted revenues by $3 million.
Interactive Group revenues surged 51.9% year over year to $91.6 million driven by robust performance from social gaming and other interactive, which advanced 52% and 51.4%, respectively.
Scientific Games Corp Price, Consensus and EPS Surprise
Scientific Games Corp Price, Consensus and EPS Surprise | Scientific Games Corp Quote
Attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) remained almost flat at $293.5 million. AEBITDA from the Gaming and Lottery Systems declined 1% and 12.7% to $219.1 million and $79.1 million, respectively. Interactive AEBITDA surged almost 46% to $19.7 million.
Balance Sheet & Cash Flow
Scientific Games exited the quarter with $139.8 million as compared with $120.9 million in the previous quarter. The company’s long-term debt was $8.07 billion compared with $8 billion as of Dec 31, 2015. The company lowered debt by paying down $17 million.
Cash flow from operations was $76.2 million as compared with $150.9 million in the previous quarter.
Zacks Rank & Stocks to Consider
Currently, Scientific Games carries a Zacks Rank #3 (Hold). Better-ranked stocks are CACI International (CACI - Free Report) , CGI Group (GIB - Free Report) and Hasbro (HAS - Free Report) in the broader sector. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The Zacks Consensus Estimate for the current year has increased 1.1% for Hasbro in the last seven days. However, for CACI and CGI estimates have remained stable in the same period.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>