This company went from making cast-iron slot machines in the 1930s to seeing record quarterly earnings with technology driven slots and gaming systems of the new century.
Bally Technologies, Inc. ( BYI ), headquartered in Las Vegas, Nev., incorporated in September 1968, but actually traces its history back to 1932 and the original cast-iron slot machine, the "Bally Baby."
Today, Bally, a Zacks #1 Rank (Strong Buy), is one of the largest manufacturers of slot and video machines in the gaming industry. The company also designs computerized monitoring systems for casinos that provide networked accounting and security services for their machines. BYI has installed 300,000 game monitoring units at more than 225 locations.
The company also operates Rainbow Hotel Casino, a 35,000-square foot dockside location in Vicksburg, Miss., which has 12 table games and 900 gaming devices.
On Feb 13, the company reported record second-quarter earnings and revenue. BYI saw net income of $24.4 million, or 42 cents per share, compared with a loss of $2.5 million, or 5 cents per share, in 2006. Bally beat analysts' consensus estimates by three cents. Revenue rose 53 percent to $230.7 million from $150.9 million in the second-quarter a year ago.
The company is bullish about the remainder of 2008. Bally raised its 2008 earnings guidance to a range of $1.60 to $1.90, from an earlier range of $1.55 to $1.85 per share.
BYI expects to see continued year-over-year growth in three of its segments: game sales, gaming operations, and system revenues. The company also expects margins to improve on game sales and operations compared to 2007.
Brokerage analysts raised consensus estimates after the earnings report and updated guidance. One covering analyst out of six raised for the third quarter by one cent to and average of 49 cents from 48 cents per share. One also lowered. After the company raised full-year guidance, five out of six covering analysts raised for the year by four cents to $1.82 from $1.78 per share.
Bally has surprised on earnings by 27.85 percent over the last two quarters. The company has a P/E of 19.87.
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$39.11 (02/29/08)
