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Analyst Blog

Scientific Games Corp. (SGMS - Free Report) reported third-quarter 2016 loss of $1.13 a share, which was much more than the Zacks Consensus Estimate of a loss of 90 cents. In the prior-year quarter, the company’s adjusted loss per share was 85 cents.

Quarterly Details

The company’s revenues of $720 million were however better than the Zacks Consensus Estimate of $713 million and the prior-year quarter’s revenues of $672 million.

Gaming Segment– Revenues increased 4.5% year over year to $448.2 million. Revenues from gaming operations fell 5.9% year over year to $182.4 million, while machine sales revenues increased 21.8% from the year-ago quarter to $159.8 million. Gaming systems sales declined 3.5% to $57.6 million while table products revenues increased 3.4% to $48.4 million..

Lottery Segment – Revenues decreased 2.5% year over year to $186.6 million.  Revenues from Instant games remained flattish year over year at $137.7 million. Product sales surged 21.8% year over year to $10.6 million.  However, this was offset by a decline of 14.9% year over year in revenues from Services ($38.3 million).  

Interactive Group– Revenues increased 34% year over year to $85.2 million. This was primarily due to a 34.4% year-over-year increase in social gaming revenues.

In the reported quarter, the company’s attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) were $271.6 million. AEBITDA from the gaming segment came in at $209.9 million. The same for Lottery Systems was $77.3 million while that for the Interactive segment was $13.6 million.

Balance Sheet & Cash Flow

Scientific Games exited the quarter with $120.9 million in cash and cash equivalents compared with $128.7 million as on Dec 31, 2015. The company’s long-term debt was $8 billion compared with $8.2 billion as of Dec 31, 2015.

Cash flow from operations was $150.9 million in the quarter, an increase of 7% from the prior-year quarter.

SCIENTIFIC GAME Price and EPS Surprise

SCIENTIFIC GAME Price and EPS Surprise | SCIENTIFIC GAME Quote

Zacks Rank & Stocks to Consider

Currently, Scientific Games has a Zacks Rank #3 (Hold). Better-ranked stocks include Silicon Motion Technology Corp. (SIMO - Free Report) with a Zacks Rank #1 (Strong Buy), and Ambarella (GIG - Free Report) and Groupon, Inc. (GRPN - Free Report) with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Silicon Motion Technology delivered a positive earnings surprise of 12.85% in the trailing four quarters.

Groupon delivered a positive earnings surprise of 31.07% in the trailing four quarters.

GigPeak delivered a positive earnings surprise of 37.50% on an average in the trailing four quarters.

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