In preparation for IGT's F4Q 2013 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.
DOUBLEDOWN
- We are pleased with our success at DoubleDown and we expect that the transaction will be accretive on a GAAP basis in the first quarter of fiscal 2014.
- I think those (new) markets will develop perhaps a little bit slower than we thought, though my comment last period was in anticipation of multiple quarters. As we enter new markets, we do expect that there may be some downward pressure on ARPU as DAU picks up, and we did see a pickup in DAU. I think the positive surprise for us this quarter is that it didn't damage ARPU, and actually we're seeing incredibly strong conversion rates continue in our domestic markets. Over time, I still expect that there may be some pressure on that ARPU number as we further penetrate the international markets, but we didn't see that materialize in this quarter which was a great surprise.
SHIP SHARE
- We are confident that we maintained our industry-leading ship share in the replacement market this quarter.
INTERNATIONAL
- I think we are starting to see some signs of improvement.
- I think in the game ops side, we've seen a lift in our installed base in the international marketplace.
- Despite ongoing challenges in certain regions, there is still significant potential in our international business as we leverage our investments in localized content and infrastructure improvements.
- I would put in the great opportunity in South America for us, if we can tackle the structural issues of really getting product to market there efficiently, effectively for our customers.
- In Asia, great opportunities there for us.
- In Europe, it's just very spotty. It kind of comes and goes in Europe by country and by product type. The VLT part of that business in Europe seems to be growing a bit faster and with more health than the traditional casino business.
- I would say Europe growing the slowest, the other two growing about the same.
GAMING OPS
- Gaming operations capital expenditures are expected to decrease year-over-year as we remain focused on disciplined capital deployment.
- We are striving to improve yields through a variety of initiatives. As we mentioned earlier this year, we are increasing our MegaJackpots team, leveraging our franchise titles, launching direct-to-player marketing efforts, and introducing Game Changers, a value-oriented product in the MegaJackpots category. We are beginning to gain traction from these initiatives as demonstrated by the enduring popularity of Wheel of Fortune brand in new titles like Wheel of Fortune Triple Wild Spin.
- We're holding up on margins which again is what we were focused on is when you see these gross gaming revenue trends coming, and you don't see an end in sight, the focus has to move from the revenue line to profit
IGTi
- At IGTi, revenues were up 26% year-over-year, excluding the prior year impact of our former European online poker network. We continued momentum in this business, both in our existing markets where we attracted 15 new partners since a year ago and are excited about new markets like New Jersey, where our prospects to partner with some of our land-based customers, we're working on now.
STOCK BUYBACK
- We have about $520 million remaining on our board-authorized repurchase. We continue to target using that authorization over the next two to four years, which is consistent with what we've said in the past.
CUSTOMER TRENDS
- We haven't really seen a significant change in the tenor of those conversations.
- The volume has not picked up as far as the volume of the voice from the customer on concern about their budget. So I would say the volume is there. The people we're hearing from are different than they were a year ago or different than they probably even were a quarter ago.
CANADA SHIPMENTS
- We think our last shipments into – less meaningful shipments relative to the, if you will, the replacement cycle will conclude next quarter. Again that's pending timing of orders and customer demand which is not something we control. But we would expect that to significantly taper off after Q4 FY 2013 and currently expect that Q4 will be less robust than this quarter was.
CUSTOMER TRENDS
- We haven't really seen a significant change in the tenor of those conversations.
