WMS Industries Inc.'s (WMS) fiscal fourth-quarter profit fell 69% on lower sales as the company launched a large restructuring plan in response to weaker demand.
The maker of slot machines, lottery terminals and videogame machines also lowered the top-end of its 2012 guidance, calling for 3% to 5% sales growth. The company in April projected $810 million to $850 million of revenue, which would raise the top line about 3% to 9% over 2011.
A rebound in gambling activity has helped boost revenue companies that supply casinos and other sites, though WMS company stumbled in its third quarter due to shipment delays and lower-than-expected demand.
On Thursday, the company unveiled plans to cut about 10% of its staff to streamline its business. WMS also said it will emphasize its leased machines in an effort to build a more stable revenue stream.
"Given our outlook for flat near-term industry replacement demand and the industry's current pace of new technology adoption, we recently conducted a thorough review of our business strategies and product plans," Chairman and Chief Executive Brian R. Gamache said. "As a result, we are refining our product plans and restructuring our organization to sharpen emphasis on WMS' content and product development strengths."
Rival International Game Technology (IGT) last week reported better core earnings on higher product sales, prompting the competitor to raise its full-year view for the second time.
For the quarter ended June 30, WMS reported a profit of $10.3 million, or 18 cents a share, down from $33.6 million, or 56 cents a share, a year earlier. The latest quarter included 26 cents of net charges from restructuring costs, write-downs and other one-time items. Analysts polled by Thomson Reuters expected a 53-cent per-share profit.
Revenue slumped 4.8% to $203.2 million. In April, the company forecast a top line between $210 million and $220 million.
Total gross margin narrowed to 57.4% from 63.8%.
Product sales, which make up the bulk of revenue, slipped 3.3% as the number of new units sold fell 8%.
Revenue from gaming operations--which provide a cut of proceeds from machines the company places on casino floors--fell 7.3% as the average installed base dropped 7%.
WMS's shares closed at $25.28 and were inactive after-hours. The stock is off 44% this year after Thursday's broad market sell-off.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com