In preparation for IGT's FQ2 2012 earnings release tomorrow afternoon, we’ve put together the recent pertinent forward looking company commentary.
Stifel Nicolaus Technology & Telecom Conference (2/8/2012)
- “We have completely reorganized our international operations and are growing that business in the kind of the mid-teens right now.”
- "If you look at those 950,000 boxes that are in the U.S., and Canada, in the North American market, about 600,000... are eligible for replacements in any given year... Right now, we're running at about 50,000 replacement units and then probably another 10,000 to 15,000 conversion kits as an industry. So, we're replacing a little bit more than 10% of the floor in any given year, which feels like about normal for us. And so we're not expecting any kind of major investment in the replacement cycle. Moving forward, we're actually trying to lower that tentpole right now by – again, looking for more distribution channels for that content whether that would be into the international markets, the online wager based or the virtual currency social based schemes."
- “There's only 1.5 million...fully regulated licensed slot machines outside the U.S. And that 1.5 million number is growing at three times the rate high single-digits versus low single-digits.”
- "For online gaming in the U.S., I think ... it's going to be kind of on a state-by-state basis... the first step will likely be poker which is peer-to-peer gaming rather than house-banked gaming like sports or casino... The states will probably try to ring fence the player liquidity. There will be four or five networks within each state and it will promote online gaming, but it won't be a very attractive product."
- [Cloud technology] “I think this month we'll be going into a casino in Estonia, then the following month it will be going into a casino in France, following that a casino into Mexico and then by October of this year at the big trade show, it will be a commercially available product and be adding to our systems revenue.”
- [Stock buyback] “We're confident that we'll do about $100 million this year still, which will be about $25 million a quarter. We just started a little slow this fiscal year. So we'll be making that up over the course of the next nine months and that free cash flow, like I said, combined with dividends and the share repurchase program we're returning about $200 million a year to our shareholders."
- "We're making about $200 million of investment in CapEx, which is mostly into the gaming operations business."
Youtube from FQ1 2012 Conference Call
- "Our newest participation products, Ghostbusters, Hangover and Pinball MLD are all performing above average. The product pipeline remains robust as well. We expect Big Buck Hunter, Elvis the King and another exciting version of Sex in the City to launch this fiscal year."
- "We anticipate average revenue per day and gross margins in gaming operations to improve throughout the remainder of fiscal 2012."
- "We anticipate units and revenues to be up double digits year-over-year for our international business for 2012."
- "We would anticipate seeing sequential improvements in yields due to the seasonality of the business as we move into this quarter and then June and then September generally is the seasonally strongest."
- "We think we are going to grow with the market, continuing to believe that, we will be in the 45 to 50% for new openings, given the increase that we typically get for new openings driven by our poker platform and then given the historically longer length of replacement for poker, we tend to be in the mid-30s in the replacement share. And that's what we continue to expect will happen in the upcoming quarters."
- "Essentially we understand how much R&D our P&L will support and then against that level of R&D we run a portfolio management approach where we look at the projects and we always have more appetite to spend than we have capacity to spend. So we make sure that we just draw the cut line at the $200 million, and make sure that all of those projects have a significantly higher return on investment than our average WACC."
- "We are anticipating improving volumes and gross margin from our North American product sales over the course of 2012. For example, our premium core products like the G23 MLD and Universal Slant MLD represent a significant portion of our shipments and have gained quick acceptance in the marketplace. Our ship shares are improving and the new openings in Ohio and New Jersey are currently planned to ship this year."
- "We are reiterating our adjusted earnings guidance from continuing operations of $0.93 to $1.03 per share, not including any potential impact from the Double Down acquisition."
- "In Macau we still have relatively low market shares, sub 20%."
- [Domestic replacement sales] "We feel like it's headed north....And I think the way to think about it in terms of unit flow in total, on a consolidated basis is, a nice step up in the March quarter, and then kind of consistent in the June quarter. And then it would appear that the fourth quarter, as is quite often the case, is going to be the strongest quarter, not due to any one thing, other than just timing of openings and the like."
