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International Game Technology (IGT)
Q1 2013 Earnings Call
January 22, 2013 5:00 pm ET
Matthew G. Moyer - Vice President of Investor Relations
Patti S. Hart - Chief Executive Officer, Director and Member of Stock Award Committee
John Vandemore - Chief Financial Officer, Principal Accounting Officer and Treasurer
Carlo Santarelli - Deutsche Bank AG, Research Division
Felicia R. Hendrix - Barclays Capital, Research Division
Shaun C. Kelley - BofA Merrill Lynch, Research Division
Robin M. Farley - UBS Investment Bank, Research Division
Joseph Greff - JP Morgan Chase & Co, Research Division
Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc., Research Division
Harry C. Curtis - Nomura Securities Co. Ltd., Research Division
Michael Goltsman - Citigroup Inc, Research Division
Previous Statements by IGT
» International Game Technology Management Discusses Q4 2012 Results - Earnings Call Transcript
» International Game Technology Management Discusses Q3 2012 Results - Earnings Call Transcript
» International Game Technology's CEO Discusses Q2 2012 Results - Earnings Call Transcript
Matthew G. Moyer
Thanks, Kim, and good afternoon, and welcome to IGT's First Quarter Fiscal Year 2013 Earnings Conference Call. On the call with me today are Patti Hart, CEO; and John Vandemore, CFO.
Before we begin, I would like to remind listeners our discussion will contain forward-looking statements concerning matters, such as our expected financial and operating performance, including our guidance for fiscal 2013; our expectations for the economy in general and the gaming industry in particular; the expected impact of the DoubleDown acquisition; and our strategic, operational and product plans. Actual results may differ materially from the results predicted, and the reported results should not be considered as indicative of future performance. Potential risks and uncertainties that could cause our business and financial results to differ materially from our forward-looking statements are included in our filings with the SEC, including our most recent annual report on Form 10-K. All information discussed on this call is as of today, January 22, 2013, and IGT does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances.
In addition, on today's call, we discuss certain non-GAAP financial measures, including adjusted earnings per share from continuing operations, adjusted operating expenses and adjusted earnings per share from continuing operations and guidance. Reconciliations of these non-GAAP measures to the GAAP measures we consider most comparable can be found in today's earnings release, which is posted on the Investor Relations section of your website, www.igt.com, and included as exhibit 99.1 to the Form 8-K we furnished today to the SEC. All references to 2013 or the 2013 year refer to our fiscal year 2013. With all that in mind, I'll turn the call over to Patti.
Patti S. Hart
Thanks, Matt, and welcome, everyone. We are off to a really great start in 2013 with a terrific first quarter, a quarter that we believe demonstrates the strength of our business portfolio and both the effectiveness and efficiency of the day-to-day management of our business.
We are making progress in many areas but the 3 critical things that highlight our performance from my perspective in this first quarter are, first, our core products continue to perform. We shipped more units in this quarter than in any first quarter in 4 years. Secondly, our gaming operations franchise is generating healthy profits. In a challenging environment, with gross gaming revenue declines and aggressive investments by our competitors, our franchise continues to lead the market, generating profits and delivering returns for our shareholders. And third, our social gaming business through our DoubleDown franchise adds to our top line growth, while holding our position as the #3 top-grossing app on Facebook, becoming the #6 top-grossing iPad app and growing our average revenue per daily active user from $0.28 last quarter to over $0.30 today, all while leveraging the launch of our legacy content like Wolf Run and the DoubleDown Casino.
Beyond these 3 highlights, we are proud of the performance of so many dimensions of our business, including growing total revenues 19% to $530 million, our highest first quarter performance in 4 years; expanding adjusted earnings per share from continuing operations 65% to $0.28 and GAAP earnings per share from continuing operations up 41% to $0.24; and increasing North American product sales revenues 54% and units recognized by 89%.
To sum it up, we like what we see at this point in the year, a year that is off to a good start with significant momentum. As previously mentioned, we anticipate a fourth straight year of double-digit growth in adjusted earnings from continued operations. It's a remarkable track record with our fourth year expected to be our strongest. We are building on a stable foundation that will only get better with our continuous improvement approach.
It's very clear we are executing on a strategy with an eye towards delighting our customer and returning to our shareholders. With that, I'll ask John to share some of the financial details. John?
Thank you, Patti. Overall, we are very pleased with our financial results for the quarter. Meaningful top line growth in North American machine sales and the ongoing ramp-up of social gaming, combined with a healthy expansion in gaming operations margins, drove consolidated results. And despite a challenging environment in portions of our business, a strategic focus on profitability and returns on invested capital continued to prove out. Let me begin the details with our gaming operations business.