IGT awaits turnaround in replacement sales as cost-cutting boosts up

International Game Technology expects its business will revive in the next year.

It's just not sure when.

The Reno-based maker and operator of slot machines and gaming systems said last week it generated $515.7 million in revenue and posted profits of $73.3 million during the quarter ended Dec. 31.

This compares with revenues of $601.6 million and profits of $61.2 million a year earlier. The year-earlier figure included $17.4 million charges for restructuring as IGT trimmed its staff and undertook other cost-cutting.

The company said it shipped 11,200 slot machines during the quarter, down from the 14,000 it shipped a year earlier. IGT is the largest manufacturing company in Nevada.

But the company said cost-cutting efforts led to gross margins of 52 percent on the slot machine sales, up from 50 percent a year earlier.

It posted even better margins 62 percent on its gaming operations business, networks of linked slots. Those operations generated $277 million in revenue during the most recent quarter, down from $313 million a year earlier.

Pat Cavanaugh, IGT's chief financial officer, told industry analysts last week the company expects to see an uptick in the number of slots it sells to casinos that need to modernize their slot floors.

But it's difficult to predict exactly when that might happen, he said, as casino operators themselves are having trouble predicting the near-term future of their business.

Weak consumer spending continues to drag sales of new slots machines and dampens revenues from IGT's gaming operations business.

International sales also remain weak, IGT said last week, although markets in Europe and Latin America were relatively strong during the most recent quarter.