IGT: U.S. demand softens, but mid-year pickup likely

International Game Technology is coming off a quarter that saw some of the weakest domestic demand for its slot machines in nearly a decade.

While the next 90 days aren't expected to be any great shakes, either, the company's chairman and chief executive officer says things should start turning around in the middle of this year.

Reno-based IGT last week said it shipped 20,200 machines worldwide during the quarter that ended Dec. 31, down 25 percent from year-earlier totals. U.S. demand was at its lowest level since 1998.

But TJ Matthews, the company's top executive, said three factors are likely to spur better business as this year unfolds:

* Shipments to big new casino properties in Las Vegas, expanded Indian casinos in California and other properties around the country. By the 2010, Matthews told investment analysts, IGT foresees demand for 100,000 slot machines in the United States.

* International sales are growing so quickly that it's possible that IGT's business in other parts of the world could outstrip its North American sales before long. In the quarter that just ended, the company exported 6,800 casino units.

* The roll-out of server-based gaming, probably in 2009, which will allow casino operators to easily control a casino floor from a centralized server.

In the meantime, Matthews said, IGT makes progress on improving its profit margins and pricing. He noted that even though the number of units shipped by the company fell by 25 percent in the most recent quarter, revenues from those sales were just 1 percent below year-earlier figures.

IGT's total revenues which include its linked mega-jackpot systems as well as machine sales totaled $645.8 million compared with $642.3 million a year earlier.

The company's net for the quarter was $113.7 million compared with $121 million a year earlier.