Foreign sales boost IGT net

Booming overseas sales, particularly in Japan, propelled International Game Technology's earnings to $34.4 million, or 32 cents a share, for the fiscal 1999 first quarter ended Jan. 2.

The net income was 16 percent higher than the $29.7 million, or 26 cents a share, recorded in the year-ago period, IGT said. Revenue jumped to $221.7 million from $165 million.

The Reno-based slot and video-game maker said product sales jumped 43 percent in the latest quarter, to $136.6 million from $95.4 million in the year-earlier period.

IGT said it sold 32,000 machines worldwide during the quarter, up from 14,600 a year ago. International sales of 25,000 units, including more than 14,000 pachisuro units to Japan, accounted for 58 percent of the latest quarter's revenue.

Domestically, IGT said it shipped 7,200 machines in the recent quarter, down from 8,600 a year ago. IGT said the latest results were below expectations due to the rescheduling of some shipments, including machines for Mandalay Bay, to the current quarter.

IGT said it shipped 800 units of a 3,000-machine order to the Ontario Lottery Commission during the quarter and expects to ship another 4,700 in the current quarter. The Ontario agency is expected to order a total of 13,000 units, IGT said.

IGT said its profit margin on product sales slipped to 36 percent from 43 percent in the year-ago quarter due to the larger mix of foreign sales and shipment of new, lower-margin products domestically.

The company also said its revenue from gaming operations -- primarily revenue participation games such as Slotopoly, Elvis and Megabucks -- rose 22 percent to $85.1 million. The profit margin on such games rose to 55 percent from 51 percent, IGT said.

Dave Ehlers of Las Vegas Investment Advisors Inc. noted that product sales were down about $9 million from the quarter ended Sept. 30 and that pre-tax profit margins declined from 27.7 percent to 23.4 percent, year over year.

"That probably reflects the costs of digesting the British and Australian acquisitions and the changing product mix," Ehlers said.

IGT bought British gamemaker Barcrest Ltd. and Australian slot manufacturer Olympic Amusements PTY Ltd. in 1998.

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