Expand / Collapse search
Watch TV
Menu

This material may not be published, broadcast, rewritten, or redistributed. ©2024 FOX News Network, LLC. All rights reserved. Quotes displayed in real-time or delayed by at least 15 minutes. Market data provided by Factset. Powered and implemented by FactSet Digital Solutions. Legal Statement. Mutual Fund and ETF data provided by Refinitiv Lipper.

story

Alliance Gaming Cuts 2004, 2005 Outlook on Lower Revenue

By Reuters
Published | Updated

LOS ANGELES – Slot machine maker Alliance Gaming Corp. (AGI) Tuesday cut its profit forecast due to lower revenue from some games and higher expenses, sending its stock down more than 22 percent.

Shares of Alliance rivals, including International Game Technology (IGT), also fell, but a number of analysts said Alliance's problems were not industrywide.

Las Vegas-based Alliance, which also operates a casino in Mississippi, forecast earnings from continuing operations of 96 cents to $1 per share for its 2004 fiscal year ending June 30, down from its prior forecast of $1.04.

It also said it expects fiscal 2005 earnings of $1.20 to $1.30 per share, down from its April forecast of "at least" $1.40.

Analysts polled by Reuters Estimates on average forecast earnings per share of $1.05 for fiscal 2004 and $1.44 for fiscal 2005.

In cutting its 2004 forecast, Alliance cited lower yields on certain recurring-revenue games; slower deployment of games for the New York Lottery (search); possible lower game orders, including in California; and a significant increase in research and development expenses at Sierra Design Group (search), which it bought in March for $124.5 million, and at its Bally unit.

It also said competition was stiff and regulation uncertain in Class II gaming (search) -- sophisticated electronic bingo-style machines that are used in markets that do not allow traditional slots.

Deutsche Bank analyst Marc Falcone said Alliance might have to cut its outlook even more, but he said International Game and another rival, WMS Industries Inc., should not be affected. "We believe this is a company-specific issue," he wrote in a research note.

Smith Barney and Goldman Sachs also said in research notes that the Alliance news should not affect the company's rivals.

Alliance shares were down $4.94 at $16.45, their lowest level in nearly a year, on the New York Stock Exchange and were the biggest percentage loser on the exchange.

International Game shares were down 94 cents, or 2.3 percent, at $39.82, and WMS was down 79 cents, or 2.6 percent, to $29.47.