GTECH posts 29% profit drop on weak international revenue
GTECH S.p.A. reported a 29.4 percent decline in third-quarter profit compared with the same period last year following a sharp drop in revenue from the company's International segment. GTECH's Americas segment - which has its headquarters in Providence - was the only segment to post a year-over-year revenue increase, rising 17 percent in the third quarter.
PROVIDENCE – GTECH S.p.A.’s revenue and profit declined in the third quarter of 2013 compared with the same period last year, the company reported Tuesday.
GTECH, formerly known as Lottomatica S.p.A., saw a 1.4 percent decline in revenue to €730 million ($986 million based on the exchange rate of $1.35 per euro on Sept. 30), compared with €740.1 million ($999 million) in the third quarter of 2012.
The company’s profit fell 29.4 percent to €38.8 million ($52.4 million) from €54.9 million ($74.1 million).
The Italian lottery company officially took on the name of its Providence-based subsidiary, GTECH Corp., in June. The company is now divided into three segments – Americas, International and Italy – with the Americas segment headquartered in Providence.
The Americas segment showed a revenue increase in the third quarter, rising 17 percent to €251.5 million ($339 million) from €215 million ($290 million) during the same period last year. It was the company’s only segment to see an increase in revenue on a year-over-year basis in the third quarter.
GTECH attributed the Americas-segment performance to increased product sales and strong growth in same-store revenue, which benefitted from the introduction of Powerball in California. Improvements in instant-ticket sales – primarily in Texas, North Carolina and California – also contributed to same-store revenue growth, GTECH said.
The third-quarter results included a 28.3 percent drop in revenue from the company’s International segment during the three months ended Sept. 30. Revenue in that segment fell to €81 million ($109 million) from €113 million ($153 million) last year, when GTECH said it recorded a peak in product sales. Lower EuroMillions jackpot activity and foreign exchange also impacted International-segment revenue, the company said. In addition, the company recorded a 3.5 percent decline in revenue for its Italy segment to €397.6 million ($536.7 million).
“We achieved good results in the third quarter highlighted by continued growth in the Americas and gains in the Italian Lotteries,” said Marco Sala, CEO of GTECH, in the earnings report. “We maintain our disciplined approach to capital allocation, while continuing to explore potential new global operator opportunities.”