Int'l Game Technology Beat On 4Q Revenues

Deutsche Bank has published a research report on International Game Technology

following the company's reporting of 4Q revenues that beat out estimates while EPS came in just below. In the report, Deutsche Bank writes "Although IGT's FY11 EPS guidance of $0.77-$0.87 optically stacks up poorly against sell-side consensus of $0.95, our recent conversations w/ investors suggest many were braced for a comparatively soft outlook. As such, we question whether there will be any lasting impact on the stock, particularly ahead of a stronger new openings schedule in FY12 & potential stemming/reversal of recent ship share declines (driven by new products). F4Q10 results had some gives & takes (see below). We like the name best when sentiment is weak (i.e., now). Buy. Adj. EPS of $0.18 missed consensus/our est. by a penny due primarily to some margin downside on the gaming ops. side, but revs of $496m beat our $490m forecast & consensus of $487m; upside there was driven by int'l. product sales. The 2,200 N. America replacement units shipped in 4Q were in line w/ our est. (56% of total N. America ships), and imply 33-34% ship share. Int'l. sales beat on both volume & price, with mgt highlighting LatAm & Australia as areas of strength." Deutsche Bank maintains its Buy rating but has lowered the price target from $23 to $22. International Game Technology closed yesterday at $16.32.