WMS Revenues below target
Thursday February 7,2013 : WMS POSTS WEAKER QUARTERLY
Revenues below target and comparative…but online operations do well
The US land and online gambling group WMS has posted its latest quarterly report covering the three months ended December 31 2012, reporting weaker overall revenues, although the online operations of Williams Interactive and Jackpot Party internet casino performed well.
The company reported revenue of $157.5 million for the quarter, down 2.9 percent on the same period last year and below the consensus forecast of $166.5 million.
Net income was $4.3 million inclusive of a $2 million after-tax impact for a discrete non-U.S. tax item and $2.5 million of pre-tax expense for costs incurred in the process leading to the recently announced merger agreement with Scientific Games Corporation
The company pointed out that last year's comparative revenue was $162.2 million, which included a benefit of $2.1 million pre-tax, related to the settlement of litigation.
The slip in net income to barely a quarter of last year's $16.1 million was attributed to increases in research and development and online marketing expenses to support growth in the group`s interactive products and services, along with the impact of two interactive acquisitions.
Highlights of the quarter were:
* Gaming operational revenues increased $8 million on a year-over-year basis and $1.6 million on a quarterly sequential basis to $72.7 million, primarily reflecting continued interactive products and services revenue growth. But product sales revenue fell 15 percent to $84.8 million.
* During the quarter, Jackpot Party Social Casino, the fourth most-popular casino game on Facebook as measured by number of daily active users, generated continued revenue growth, averaging more than $100,000 a day in revenues after the Facebook payment processing fee, primarily due to higher monetisation rates and higher average daily payments by paying players. The iOS version of the app quickly climbed into the top ten largest grossing casino game apps on the iPhone from Apple.
* In the December quarter, WMS agreed to make its library of slot gaming content available to the British Columbia Lottery Corporation for its online casino.
CEO and chairman Brian R. Gamache outlined the group's land casino supply successes in the quarter, adding that interactive operations had been performing well, showing an order of magnitude increase over the comparative period.
"With the revenue growth achieved to date for interactive products and services, our investment in this attractive new product distribution channel is proving to be very prudent," Gamache said. "The early success of Jackpot Party Social Casino contributed to the $12 million in year-over-year revenue growth from interactive products and services."