Scientific Games Posts Preliminary Q4 Results, Buys Tech Art

Scientific Games Corp (NASDAQ:SGMS) recently announced preliminary fourth-quarter and full-year 2017 results. The company also concluded the previously announced acquisition of Tech Art.

The company now estimates fourth-quarter 2017 revenues between $820 million and $825 million, up 9% year over year. The Zacks Consensus Estimate for revenues is currently pegged at $808.5 million.

Attributable EBITDA is estimated between $320 million and $325 million. Scientific Games anticipates loss of approximately $40-$50 million, which includes projected $28 million of restructuring and other costs, comprising acquisition costs related to the NYX Gaming Group acquisition.

The Zacks Consensus Estimate for fourth-quarter 2017 is currently pegged at a loss of 22 cents per share.

For full-year 2017, the company expects revenues between $3.08 billion and $3.09 billion, up 7% from full-year 2016. Scientific Games projects attributable EBITDA between $1.22 billion and $1.23 billion. Net loss for 2017 is anticipated to be around $238-$248 million, down by almost $111 million from full-year 2016.

The Zacks Consensus Estimate for 2017 is currently pegged at a loss of $2.47 per share.

Scientific Games declined almost 3.4% to close at $53.00 on Jan 24.

Tech Art Buyout Completed

Meanwhile, Scientific Games completed the acquisition of Las Vegas-based Tech Art, a leading supplier of blackjack hole-card readers. The acquisition expands the company’s gaming portfolio by adding table games namely Super Fun 21 and Bet the Bust.

Further, Scientific Games will be able to strengthen its foothold in the international market with Tech Art’s MAXTime 4H, which is a combination of “blackjack hole-card reader and a chip tray”, by providing casinos globally with increased speed and security for blackjack games.

Acquisitions have been a key catalyst for Scientific Games over the years. Buyouts like Bally Technologies (2014) and WMS Industries (2013) have expanded its ability to offer computerized systems and services to the global gaming industry.

In September 2017, the company announced an agreement to buy NYX Gaming Group for about $632 million. It completed the deal early January, this year. The NYX buyout will aid Scientific Games to expand product pipeline in digital gaming and online lottery markets.

Moreover, NYX’s sport betting platform OpenBet Sportsbook will position it well in the online gambling market.

Zacks Rank & Stocks to Consider

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

Echostar Corporation (NASDAQ:SATS) , Micron Technology (NASDAQ:MU) and The Trade Desk Inc (NASDAQ:TTD) are stocks worth considering in the broader technology sector. All the three stocks sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Echostar, Micron and The Trade Desk is currently pegged at 18.50%, 10% and 25%, respectively.

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