Scientific Games (SGMS) Q4 Revenues Top, Loss Narrows Y/Y

 | Mar 02, 2018 12:29AM ET

Scientific Games Corporation (NASDAQ:SGMS) reported fourth-quarter 2017 loss of 48 cents per share narrower than the year-ago quarter’s loss of $1.26. The Zacks Consensus Estimate was pegged at a loss of 28 cents.

Revenues increased 9.4% from the year-ago quarter to $823 million and surpassed the Zacks Consensus Estimate of $810 million. The growth was driven by higher services (up 8.2%), product sales (up 10.2%) and instant game sales (up 7.5%).

Scientific Games’ shares have gained 93.4% in the past year, substantially outperforming the Scientific Games Corp Quote

Operational Details

Attributable earnings before interest, taxes, depreciation and amortization (AEBITDA) increased 11% from the year-ago period to $324.5 million driven by higher revenues, profitable revenue mix and increasing operating efficiency. AEBITDA margin expanded 40 basis points (bps) to 39.4%.

Gaming AEBITDA increased 9% year over year to $237.8 million. Gaming AEBITDA margin expanded 80 bps to 48.3%.

Lottery AEBITDA increased 20% from the year-ago quarter to $94.6 million. Lottery AEBITDA margin expanded 400 bps to 43.6% driven by higher revenues and a profitable revenue mix.

Interactive AEBITDA surged 37% to $26.9 million and margin expanded 220 bps to 23.7%.

SG&A increased 22.4% year over year to $167.7 million in the reported quarter. However, research & development (R&D) expenses declined almost 7.3% to $45.8 million.

As a result, reported operating income in the quarter was $97.2 million. In the year-ago quarter, the company reported operating loss of $12.3 million.

Interest expense declined almost 9% from the prior-year quarter to $150.2 million in the reported quarter.

Balance Sheet & Cash Flow

Scientific Games exited the quarter with cash and cash equivalents of $788.8 million compared with $196.4 million in the previous quarter. The company’s long-term debt was $8.7 billion compared with nearly $8.1 billion at the end of previous quarter.

Cash flow from operations was $118.1 million, compared with $109.5 million in the previous quarter.

Zacks Rank & Stocks to Consider

Scientific Games carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are NVIDIA (NASDAQ:NVDA) , Lam Research (NASDAQ:LRCX) and Paycom Software (NYSE:PAYC) , each sporting a Zacks Rank #1 (Strong Buy). You can see

Long-term earnings growth for NVIDIA, Lam Research and Paycom is projected to be 10.3%, 14.9% and 10%, respectively.

Don’t Even Think About Buying Bitcoin Until You Read This

The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.

Get The News You Want
Read market moving news with a personalized feed of stocks you care about.
Get The App

Zacks has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

Zacks Investment Research

Written By: Zacks Investment Research

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes