AGEM releases January index

The latest period represents the first substantial month-to-month decline since June 2013; however, compared to a year ago, the index remains up 36.19 points (+24.5 percent). 

In January of 2014, 11 of the 16 global gaming equipment manufacturers reported month-to-month declines in stock price, with seven down by more than five percent. Gaming Partners International (GPIC) reported flat stock performance from December 2013, and of the four companies that witnessed increases, only one was up by more than five percent.

The broader stock markets also posted a weak start to 2014 as all three major indices reported declines in January compared to December 2013. NASDAQ ended the month at 4,103.88, down 1.7 percent from the prior period, while the S&P 500 declined 3.6 percent to 1,782.59. Meanwhile, the Dow Jones Industrial Average (DJIA) witnessed the most substantial month-to-month decline, falling 5.3 percent to 15,698.85. The DJIA’s performance was most in line with the decline reported by the AGEM Index during the month. Profit-taking and speculation fuelled much of the recent volatility.

Selected positive contributors to the January 2014 AGEM Index included the following:

- With a stock price of us$ 23.72 (+3.4 percent), Konami Gaming contributed 0.84 points.

- Gtech contributed 0.40 points, due to its 2.0-percent increase in stock price to 22.60 euros.

Selected negative contributors included the following:

-IGT reported a stock price of us$ 14.43 (-20.5 percent) and contributed negative 5.39 points to the index.

- Crane Co. contributed negative 1.65 points, due to its 6.1-percent decline in stock price to us$ 63.16.

AGEM.org 

A number of gaming equipment manufacturers recently released their results for the latest quarterly cycle. IGT reported a 2.1- percent annual increase in net revenues during its fiscal first quarter of 2014, rising from us$ 530.3 million to us$ 541.2 million. The growth was primarily driven by growth in social gaming revenues, which increased 56.9 percent year-over-year to us$ 64.8 million. Daily active users (DAU) increased 17.4 percent during the first quarter to 1.7 million, while bookings per DAU were up 35.5 percent. Product sales revenues also reported a year-over-year increase, rising 3.7 percent to us$ 243.6 million. The growth was primarily attributable to increased video poker sales in North America. 

The growth in social gaming and product sales revenues was partially offset by a decline in gaming operations revenues, which fell 8.1 percent to us$ 223 million. The company notes that the decline was due to lower North America MegaJackpots revenue. 

Multimedia Games reported a 33.5-percent increase in net revenues during its fiscal first quarter of 2014 to a record $59.2 million. During the period, both of the company’s revenue sources reported increases compared to a year ago. Gaming operations revenues rose 12.1 percent to us$ 33.6 million due to a 13.1-percent increase in the company’s installed base. Gaming equipment and systems sales revenues increased 77.7 percent during the period to us$ 24.9 million. Despite a 7.1% percent decline in average selling price to us$ 17,366, approximately 731 more units were sold in the first quarter than a year ago. The increase is partially attributable to new customers in Pennsylvania. 

Bally Technologies reported a 19.7-percent year-over-year increase in net revenues to a quarterly record of us$ 285.2 million in the company’s fiscal second quarter of 2014. The latest growth was primarily driven by increases in systems revenues and electronic gaming machines (EGM) revenues. During the quarter, systems revenues increased 50.8 percent to an all-time record of us$ 85.5 million. Meanwhile, despite a 3.7-percent decline in the average selling price of new electronic gaming devices to us$ 15,936, EGM revenues increased 6.7 percent to us$ 88.1 million. 

The growth was primarily attributable to 1,025 units being shipped into the Illinois Video Gaming Terminal market. Gaming operations revenues reported a modest 1.7-percent decline during the quarter, falling to us$ 97.3 million. During the period, Bally successfully completed the acquisition of SHFL Entertainment. The company notes that the merger was completed ahead of schedule and the integration process is moving forward smoothly. 

Additional earnings reports are expected in the coming weeks, which should shed additional light on the industry.