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Scientific Games (SGMS) Incurs Loss Again, Q1 Sales Lag

Scientific Games Corp SGMS reported first-quarter 2016 loss of $1.07, which compared unfavorably with the Zacks Consensus Estimate of a loss of $1.01. In the prior-year quarter, the company’s adjusted loss per share was 80 cents.

Quarterly Details

The company’s revenues of $682 million fell short of the Zacks Consensus Estimate of $689 million but came in better than the prior year quarter’s revenues of $658.7 million.

Gaming Segment– Revenues decreased 1% year over year to $421.7 million. Revenues from gaming operations fell 4.7% year over year to $184.4 million, while machine sales revenues increased 5.7% from the year-ago quarter to $134.5 million. Gaming systems sales declined 10.9% to $59.7 million while table products revenues increased 13.1% to $43.1 million, respectively.

Lottery Segment – Revenues increased 0.9% year over year to $187.7 million. The segment benefited from strength in Instant games, which saw a revenue increase of 4% year over year to $134.1 million. However, this was partly offset by a decline 1.1% and 26% year over year in   revenues from Services ($45.1 million) and Product sales ($8.5 million), respectively.       

Interactive Group– Revenues increased 54.8% year over year to $72.6 million. This was primarily due to 58% growth in social gaming sales.

In the reported quarter, the company’s attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) were $259 million. AEBITDA from the gaming segment came in at $191.2 million. The same for Lottery Systems was $81.5 million while that for the Interactive segment was $15.4 million.

Balance Sheet & Cash Flow

Scientific Games exited the quarter with $145.7 million in cash and cash equivalents compared with $128.7 million as on Dec 31, 2015. The company’s long-term debt was $8.14 billion compared with $8.16 billion as of Dec 31, 2015.

Cash flow from operations was $101.1 million in the quarter compared with $77.8 million in the prior-year quarter.

Zacks Rank & Stocks to Consider

Currently, Scientific Games has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are CSG Systems International Inc. CSGS, LogMeIn, Inc. LOGM and NCI, Inc. NCIT. All three stocks sport a Zacks Rank #1 (Strong Buy).

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SCIENTIFIC GAME (SGMS): Free Stock Analysis Report
 
NCI INC-CL A (NCIT): Free Stock Analysis Report
 
CSG SYS INTL (CSGS): Free Stock Analysis Report
 
LOGMEIN INC (LOGM): Free Stock Analysis Report
 
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