IGT on Mend as Reports for the Third Quarter Indicate Change

International Game Technology (IGT) issued its financial report for the second quarter of the year this past August, suggesting that sales had plummeted by 48% from a year ago.

It wasn't shocking, considering that COVID-19 measured the whole gaming community, but the game company felt it had plans in place to help it come back fast. Those strategies may have succeeded on the basis of a recent IGT report covering its results in the third quarter.

IGT reported that its third-quarter sales had increased from nearly $981.5 million to 54% in quarter-over-quarter terms. That is a big change for the year, but much needs to be achieved.

It's only down by about 15% as compared to what was done in the same timeframe last year. Part of the profits came from heightened lottery revenues that saw the company's highest turnout in the last seven months. The calculated net income came in at $54 million after doing all the estimates available.

Revenue from Global gaming has plummeted 31.4% year-on-year, coming in at $412 million for the year. This was motivated by the continuing challenge of the coronavirus pandemic however, since casinos have started to reopen across the world, IGT is starting to see more optimistic activity to help it continue to rebound. IGT CEO Marco Sala adds:

“The resilience of our portfolio, particularly in lottery, and benefits from our swift cost reduction initiatives are on full display in our third quarter results. Strong player demand and a host of compelling new games, systems, and digital solutions led to a sharp, sequential improvement in our most important markets. We continue to monitor the evolution and impact of the pandemic around the world. With a simplified organization firmly in place, we are creating a leaner, stronger IGT.”

There was also a good leap in the EBITDA (Earnings before interest, taxes, depreciation and amortization) the quarter recorded $354.1 million in positive EBITDA - more than double what it was in the second quarter. However, as anticipated, it is also smaller than what IGT posted for last year's third quarter and the company will focus on attempting to regain the quarterly comparable gap of 13 points.

The current span allowed IGT to shore up its bank account, achieving a healthy cash balance of $220 million and raising $610 million in cash from its sales. That reversed earlier losses and IGT has overall free cash flow of $384 million for the first nine months of the year, backed by the company's increase in liquidity and net debt.

Max Chiara, Chief Financial Officer of the company, joined Sala on the call and said:

“We are on track to achieve our 2020 temporary cost-reduction targets and have identified a number of initiatives that will enable us to deliver over US$200 million of structural savings over the next two years. As a result, the improvement in our profitability should support our continued focus on reducing debt.”