IGT thinks gaming industry near its bottom

International Game Technology's top executives think the Reno-based maker of slots is beginning to see some light at the end of the tunnel.

The publicly held company last week reported its net income for the quarter ended March 31 fell to $38.3 million from $68.4 million in the comparable period a year earlier. Revenues declined to $294.5 million from $341 million a year ago.

But TJ Matthews, IGT's chairman, said the company sees some signs that things aren't getting any worse.

He said gaming markets such as Missouri, Louisiana and Arizona that serve predominately local consumers are "definitely stabilizing." The outlook is more uncertain in markets such as Las Vegas and Atlantic City, which are battling the effects of widespread new competition as well as the effects of the national economic downturn.

A flat gaming market even one that's flat at historically low levels will allow casino operators to undertake the sort of planning that leads to purchases of new slots, Matthews said.

Since the recession deepened, casino operators have been so worried that they've cut back even on regular

replacement of slots with newer machines. Matthews said IGT executives believe the low level of replacements is unsustainable, and orders for new machines are likely to pick up.

In the first 90 days of this year, IGT shipped 12,600 slots 5,500 of them to North American locations, 7,100 elsewhere in the world. The number of U.S. shipments was down by 1,000 units from a year ago.

The company also sees continued slowdown in its gaming operations business, the linked networks of MegaJackpots machines.

That business generated revenues of about $257 million in the most-recent quarter, down 15 percent from year-earlier figures. The problem? IGT said consumers simply aren't playing as much.

Patti Hart, who took the reins as chief executive officer and president of IGT at the start of this month, told investment analysts last week that she's continuing to dig into the company's operations and isn't yet ready to talk about any potential change in direction.

IGT employs about 2,800 at its South Meadows headquarters.