International Game Tech (IGT) Tops Q4 EPS by 23c; Boosts FY16 Cost Synergy Target

International Game Tech (NYSE: IGT) reported Q4 EPS of $0.63, $0.23 better than the analyst estimate of $0.40. Revenue for the quarter came in at $1.37 billion versus the consensus estimate of $1.3 billion.

Outlook

The Company's outlook assumes it is successful in securing the Italian Lotto concession. The Company currently expects to achieve adjusted EBITDA of $1,740-$1,790 million for the full year period, supported by growth in core operations and using an average euro/dollar exchange rate of 1.10 versus 1.11 last year. A modest headwind is expected from other currencies, notably the British pound, Australian dollar, and certain Latin American currencies.

The Company has increased its cost synergy target to $270 million from its prior expectation of $230 million and continues to expect revenue synergies of $50 million. Compared to 2015, at least $70 million in incremental synergies is included in the EBITDA guidance for 2016. The synergies are expected to mitigate the anticipated impacts of currency translation, higher gaming machine taxes in Italy, and a lower contribution from Lotto as a result of new concession terms.

Capital expenditures excluding the Lotto concession are expected to be $575-$625 million, including lottery maintenance and gaming capital expenditures of approximately $500 million and approximately $100 million for lottery growth capital. A successful renewal of the Italian Lotto concession would require additional capital expenditures in 2016 of at least $660 million at current rates. Net debt is expected to be $7,700-$7,900 million at the end of 2016.

For earnings history and earnings-related data on International Game Tech (IGT) click here.

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