Scientific Games Reports 4Q Results; Placing Under Review

Scientific Games SGMS reported fourth-quarter results that did not impress, as consolidated revenue declined 9% to $212 million and net income declined 75% to a net loss of $158 million. The decline in revenue was primarily related to the firm's sale of its racing business in the year-ago quarter. Excluding the results of the racing business, revenue increased 2% to $211 million. The increase in adjusted revenue came from the core instant ticket business, which increased sales 7% to $124 million as U.S. retail ticket sales grew 5% from the year-ago quarter. Scientific reported an operating income loss of $11 million this quarter, besting the $70 million loss in the prior-year quarter. This quarter's loss included a host of noncash charges for underperforming lottery system contacts, obsolete equipment, and accelerated depreciation on equipment.