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Shares in International Game Technology (IGT) have experienced a significant setback, plunging nearly 9% yesterday and registering a 15% decline over the past month. 

The primary reason behind the sharp decline appears to be the looming release of IGT’s third-quarter earnings report, scheduled for 31 October.

IGT is expected to reveal a year-on-year decline in earnings, coupled with lower revenue in its upcoming quarterly report. 

According to the Zacks consensus estimate, the company is projected to post quarterly earnings of $0.43 per share, reflecting a substantial year-on-year decrease of 67%. 

Revenue is expected to decrease nearly 3% year-on-year to $1.03bn, Zacks added.

June surge

This recent decline in IGT’s stock price comes after a significant increase in June, when the company’s shares rose from $25.75 on 5 June to $31.50 on 8 June. 

At that time, IGT announced that it was evaluating strategic alternatives for its Global Gaming and PlayDigital segments, including a potential sale, merger or spin-off, or further investment in these business units.

“Over the last three years, IGT has sharpened its strategic focus by reorganising around core product verticals, monetising non-core assets, reducing structural costs and significantly improving its credit profile,” IGT executive chair Marco Sala said at the time. 

He emphasised the company’s commitment to enhancing value for shareholders, believing that the intrinsic value of IGT’s businesses and cash flow profile was not adequately reflected in its share price.

Six-month stock journey

Looking over the past six months, the stock has dropped 6.4%, having peaked at $33.83 on 31 July. This surge was tied to IGT’s positive Q2 results and an upward revision in the company’s earnings guidance for the full year 2023.

Initially projected to be between $4.1bn and $4.3bn, the company later confirmed a revenue range of $4.2bn to $4.3bn.

In Q2, IGT reported a 3.3% year-on-year growth in total revenue, increasing from $1.02bn in Q2 2022 to $1.06bn in the latest quarter. 

The company attributed this growth to a substantial 13% increase in revenue from its Global Gaming segment, which supplies slot machines to land-based casinos.

Quarterly revenue for this segment surged from $330m to $373m. 

Additionally, IGT’s casual online PlayDigital segment witnessed a 37% year-on-year revenue increase to $59m.

The Global Lottery segment, meanwhile, experienced a 3.7% year-on-year decline to $624m.

However, executive chair Sala did not update the market about the progress of the ongoing strategic review in July, and uncertainty about its outcome persists to this day. 

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