TJ Matthews is absolutely certain that International Game Technology is poised to benefit from the spread of legalized gaming into more states.
But the president and chief executive officer of the Reno-based company said last week he's not sure when it will happen.
The company earned $121 million on revenues of $642.3 million in its quarter ended Dec. 31, up from earnings of $120.6 million on revenues of $616.2 million a year earlier.
But Matthews said there's not much to be excited about in the near-term future.
"We're in a very ordinary point in the buying cycle," Matthews told securities analysts after the company announced its earnings.
More sophisticated slot technology is pushing some casino operators to buy new gear from IGT, he said, but that's nothing like the big boost the company got when it rolled out ticket-in, ticket-out technology a few years ago.
"There isn't a strong catalyst for accelerating replacement activity," he said.
One potentially big market later this year could be Japan, which is mandating the conversion of well over 1 million older-style gaming machines. Matthews said it's uncertain how much of that replacement business IGT will land.
Also positive over the longer term, he said, is the number of states that are considering legalization of gaming or expansion of existing gaming to generate government revenue.
"It is only a question of 'when' in most states," Matthews said. But the timing of increased legalization remains so murky, he cautioned, that IGT isn't willing to make any predictions.
The company shipped 26,800 machines during the quarter compared with 29,100 a year earlier.
Its gaming operations unit which operates the wide-area MegaJackpots systems generated revenues of nearly $325 million during the quarter compared with $291 million a year earlier.
