It has been about a month since the last earnings report for Scientific Games Corp . Shares have added about 4.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Scientific Games Posts Wider-than-Expected Q1 Loss
Scientific Games reported first-quarter 2017 loss of $0.92 per share, which was wider than the Zacks Consensus Estimate of a loss of $0.74 but narrower than the year-ago quarter loss figure of $1.07.
Driven by growth across board, revenues increased 6.4% from the year-ago quarter to $725.4 million, which was better than the Zacks Consensus Estimate of $711.5 million. However, unfavorable foreign currency exchange impacted revenues by $8.1 million.
Quarter Details
Gaming Segment revenues increased 4.3% year over year to $440 million. The increase was primarily attributed to growth in machine sales, gaming systems sales and table products by 16.1%, 3% and 15.8%, respectively, partly offset by lower revenues in gaming operations (down 6.5%). Unfavorable foreign currency exchange also impacted revenues by $5.1 million.
During the quarter, the company shipped 5,862 new gaming machines globally. International shipments were up 5%, reflecting increases in both replacements and new casino openings.
Lottery Segment revenues were up 0.7% year over year to $189.1 million. Instant games revenues grew 4.5% whereas Services’ revenues declined 13.5% from the year-ago quarter. Product Sales grew 16.5%. Unfavorable foreign currency exchange impacted revenues by $2 million.
Interactive Group revenues surged 32.6% year over year to $96.3 million, driven by robust performance from social gaming and other interactive, which advanced 33.2% and 29.8%, respectively.
Attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) increased 10.7% to $286.6 million. AEBITDA from the Gaming and Lottery Systems declined 9.7% and 4.7% to $209.7 million and $85.3 million, respectively. Interactive AEBITDA surged almost 49.4% to $23 million.
Balance Sheet & Cash Flow
Scientific Games exited the quarter with $131.9 million compared with $115.1 million in the previous quarter. The company’s long-term debt was $8.07 billion compared with $8.02 billion as of Dec 31, 2016. The company lowered debt by paying down $45 million.
Cash flow from operations was $110 million compared with $101.1 million in the previous year quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to three lower. In the past month, the consensus estimate has shifted lower by 6.9% due to these changes.
Scientific Games Corp Price and Consensus
VGM Scores
At this time, Scientific Games' stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. The stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth and to a lesser degree momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Scientific Games (SGMS) Up 4.2% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Scientific Games Corp . Shares have added about 4.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Scientific Games Posts Wider-than-Expected Q1 Loss
Scientific Games reported first-quarter 2017 loss of $0.92 per share, which was wider than the Zacks Consensus Estimate of a loss of $0.74 but narrower than the year-ago quarter loss figure of $1.07.
Driven by growth across board, revenues increased 6.4% from the year-ago quarter to $725.4 million, which was better than the Zacks Consensus Estimate of $711.5 million. However, unfavorable foreign currency exchange impacted revenues by $8.1 million.
Quarter Details
Gaming Segment revenues increased 4.3% year over year to $440 million. The increase was primarily attributed to growth in machine sales, gaming systems sales and table products by 16.1%, 3% and 15.8%, respectively, partly offset by lower revenues in gaming operations (down 6.5%). Unfavorable foreign currency exchange also impacted revenues by $5.1 million.
During the quarter, the company shipped 5,862 new gaming machines globally. International shipments were up 5%, reflecting increases in both replacements and new casino openings.
Lottery Segment revenues were up 0.7% year over year to $189.1 million. Instant games revenues grew 4.5% whereas Services’ revenues declined 13.5% from the year-ago quarter. Product Sales grew 16.5%. Unfavorable foreign currency exchange impacted revenues by $2 million.
Interactive Group revenues surged 32.6% year over year to $96.3 million, driven by robust performance from social gaming and other interactive, which advanced 33.2% and 29.8%, respectively.
Attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) increased 10.7% to $286.6 million. AEBITDA from the Gaming and Lottery Systems declined 9.7% and 4.7% to $209.7 million and $85.3 million, respectively. Interactive AEBITDA surged almost 49.4% to $23 million.
Balance Sheet & Cash Flow
Scientific Games exited the quarter with $131.9 million compared with $115.1 million in the previous quarter. The company’s long-term debt was $8.07 billion compared with $8.02 billion as of Dec 31, 2016. The company lowered debt by paying down $45 million.
Cash flow from operations was $110 million compared with $101.1 million in the previous year quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to three lower. In the past month, the consensus estimate has shifted lower by 6.9% due to these changes.
Scientific Games Corp Price and Consensus
Scientific Games Corp Price and Consensus | Scientific Games Corp Quote
VGM Scores
At this time, Scientific Games' stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. The stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth and to a lesser degree momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.