Will SGMS Post Profit in 4Q? - Analyst Blog
March 08 2013 - 4:30AM
Zacks
Scientific Games
(SGMS) is scheduled to release its fourth
quarter 2012 results on Mar 11, 2013, after the closing bell.
Scientific Games posted a negative surprise of 214.3% in the third
quarter. The company has posted an average negative surprise of
136.9% over the last four quarters. Let’s see how things are
shaping up for the company in this quarter.
Factors Affecting Growth
this Past Quarter
Scientific Games reported dismal
third quarter results, failing to beat the Zacks Consensus
Estimate. Loss per share widened on a year-over-year basis due to a
sharp rise in operating expenses, which fully offset a modest
revenue growth.
The year-over-year growth in
revenues was primarily driven by higher sales of lottery systems
and terminals and better-than-expected service revenues. Moreover,
strong growth in U.S. instant ticket retail sales and U.S. lottery
systems customer retail sales fully offset lackluster China instant
ticket retail sales and instant ticket retail sales in Italy during
the reported quarter.
Earnings
Whispers?
The Zacks Consensus Estimate for
the fourth quarter projects earnings of 6 cents per share while
that for fiscal 2012 stands at a loss of 36 cents per share. There
have been no revisions in the fourth quarter and full year 2012
estimates over the last 60 days.
The lack of downward movement in
estimates signals that the fourth quarter might not be too
different from the past quarters. This is also indicated by that
fact that the stock carries a Zacks Rank #3 (Hold).
We caution against stocks with
Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to
Consider
Our model states that a stock needs
to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A
Better Method) and a Zacks Rank of #1, #2 or #3 to beat earnings
estimates. You could, however, consider the following stocks that
satisfy both criteria:
Bally Technologies
Inc. (BYI) has a Zacks Rank #2 (Buy) and Zacks Earnings
ESP of +1.18%.
MGM Resorts
International (MGM) has a Zacks Rank #3 (Hold) and Zacks
Earnings ESP of +10.00%.
Fiserv Inc. (FISV)
has a Zacks Rank #2 (Buy) and a Zacks Earnings ESP of +0.76%.
BALLY TECH INC (BYI): Free Stock Analysis Report
FISERV INC (FISV): Free Stock Analysis Report
SCIENTIFIC GAME (SGMS): Free Stock Analysis Report
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