• It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

So the “Big Four” slot suppliers each increased or maintained ship share in CYQ4. That’s what they said.  Sound implausible? It does to us. IGT needs to rerun its numbers.

Here our some quotes from Q4 CY2009 conference calls:

IGT Management - “But our internal estimates should base on tracking of one order to the next, would suggest we're somewhere around 40% on the replacement side, which is consistent with where we were for Q4”

  • More like 30% for replacement demand by our estimation
  • 31% including sales into new and expanded casinos, down from 42% in CYQ3 and 39% in Q4 CY2008.

BYI Management - We estimate that we maintained our game ship share in the low 20s…”

  • We calculate ship share was more than maintained, it actually grew from Q3 CY2009
  • 20% looks like the right market share to us in Q4 but we could be off by one or two percentage points

WMS Management - We've said previously that we would be disappointed if we couldn't get above that 30% replacement share. We think we did very well for the quarter but until everybody reports, we're not going to know. I believe that if we did compare favorably to our biggest competitor who announced last week, but until the others report, we won't know exactly what our share is but we're guessing it's in the low thirties.”

  • We calculate replacement ship share at 31%, in-line with management’s assertion
  • WMS did compare favorably with IGT, increasing its overall ship share from 20% in Q3 to 26% in Q4.  Nice work.

ALL Management - In North America, an increased ship share and growth in our gaming operations installed base was more than offset by significantly lower demand, including in the systems market.”

  • We agree 100%.

The following chart shows the slot ship share trends for the “Big Four” suppliers.  Since some of the analysis involves assumptions, we may be off by a percentage point or two here and there but for the most part we feel good about our numbers.  While one quarter does not make a trend, the other three suppliers seemed to gain share in Q4 CY2009 at the expense of IGT.

DEFYING THE LAWS OF BASIC ARITHMETIC - SLOT SHIP SHARE