Wednesday, January 5, 2011

Shuffle Master (NASDAQ: SHFL): Q4 Earnings Preview 2010

Shuffle Master Inc. (NASDAQ: SHFL) is scheduled to release its fourth-quarter earnings after the closing bell on Thursday, January 13, 2011. Analysts, on average, expect the company to report earnings of 13 cents per share on revenue of $54.56 million. In the year ago period, the company reported earnings of 12 cents per share on revenue of $54.57 million.

Shuffle Master develops, manufactures and markets automatic card shuffling equipment and gaming products such as table games and slot machine software for the gaming industry. The company, which has manufacturing facilities in Las Vegas and at New South Wales, Australia, also distributes casino chip sorting machines and accessories. The company has four product segments: utility, proprietary table games (PTG), electronic table systems (ETS) and electronic gaming machines (EGM). Each segment's activities include the design, development, acquisition, manufacturing, marketing, distribution, installation and servicing of a distinct product line

In the preceding third quarter, the Las Vegas, Nevada-based company's net income was $5.8 million, or 11 cents per share, compared to $5.6 million, or 10 cents per share, in the year-ago quarter. On an adjusted basis, the company earned 13 cents per share in the latest quarter. Revenue increased 14% to $51.5 million from $45.1 million. Analysts, on average, expected the company to report earnings of 12 cents per share on revenue of $49.69 million.

The company has benefited from openings of several new markets including table games in Delaware, Pennsylvania, and Singapore, allowing it to sell shufflers to the properties, as well as other e-tables. It is also poised to benefit from a rebound in discretionary spending.

Last month, Shuffle Master announced that it has formed a strategic alliance with Leap Forward Gaming Inc.The first innovative product of a multi-phase effort from the collaboration is expected to be available to the gaming industry in spring 2011.

Late in December, the company announced an agreement with Prime Table Games LLC and related parties to settle pending litigation between the parties and to acquire important intellectual property licenses related to its table game business for an aggregate payment of $5.5 million. In a separate deal, Shuffle Master purchased from Prime Table Games licenses to the "Three Card Poker" internet rights in the British Isles for $1.5 million. The acquired internet rights include internet gambling and gambling via cell phones, in addition to certain social media uses such as play-for-fun applications on the internet.

Among other developments, the gaming products maker announced the appointment of Chief Operating Officer David Lopez, as Interim Chief Executive Officer. The company said that Lopez will remain as Chief Operating Officer and Executive Vice President.

In terms of stock performance, Shuffle Master shares have gained nearly 33% over the past year.

Full Disclosure: None.
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