Scientific Games Boosts Revenue

Scientific Games saw revenue increases in all three of its divisions in the fourth quarter, a continuation of momentum which has narrowed the supplier’s net loss.

Gaming supplier Scientific Games Corporation reported that revenues for the fourth quarter of 2017 rose to $823 million, an 8.6 percent rise over the previous year. In a conference call, company executives said the revenue jump was aided by growth in all three of its divisions—gaming, lottery and interactive.

The revenue increase also narrowed the supplier’s quarterly net loss to $43.1 million, or 48 cents per share, compared to $110.8 million, or $1.26 per share, a year earlier.

A $14.8 million decrease in interest expense and a surge in operating income to $97.2 million, reversing a year-earlier $12.3 million loss, helped shrink the quarter’s overall net loss.

“Our team is achieving solid results and our momentum continues to strengthen,” Scientific Games CEO Kevin Sheehan said on the conference call.

The company reported that gaming division revenue in the quarter rose 7 percent from a year earlier to a quarterly record $492.5 million, driven by global shipments of 10,249 new gaming machines.

Sheehan said replacement unit shipments in the United States and Canada in the quarter rose 23 percent from the previous year, and gaming systems revenue rose 31 percent, attributable to a systems rollout to casinos in Alberta, Canada.

“We believe Caesars (Entertainment) sparked a replacement cycle last year following its exit from bankruptcy,” Union Gaming analyst John DeCree said in a research note. “In our view, (Scientific Games) gained at least its fair share, if not more, of the uptick in replacements evidenced by the strong fourth quarter North America unit sales number. We expect other operators are already following suit and updating some of their slot product as we are seeing better slot yields across regional markets. It’s been a long wait, but we believe we are at the start of a replacement cycle.”

The company’s lottery segment revenue rose 9 percent to $217.2 million led by a quarterly record level of instant games revenue. Interactive segment revenue grew 24 percent to $113.3 million.