WMS climbs on 3Q profit results, 2008 sales forecast
NEW YORK—Shares of WMS Industries Inc. rose Wednesday after the company lifted its fiscal 2008 sales forecast and reported its fiscal third-quarter profit climbed 46 percent.
Late Tuesday the maker of slot machines and other casino games boosted its full-year revenue outlook to a range of $640 million to $645 million, up from its previous prediction of $620 million to $632 million.
Analysts surveyed by Thomson Financial predict 2008 sales of $632.8 million, on average.
Waukegan, Ill.-based WMS also reported quarterly earnings of 32 cents per share, which topped the 30-cents-per-share estimate of analysts polled.
Steven Wieczynski of Stifel Nicolaus & Co. anticipated the company's stock would rise, as the solid quarterly results and improved outlook came in the face of challenging economic conditions.
The gaming sector, and many other industries, have been pressured lately as consumers tighten spending due to the continued housing slowdown, escalating food and gas costs, diminishing credit and recession fears.
WMS's international growth also pleased Wieczynski.
"WMS, in our opinion has the best content of any manufacturer at this point and has shown it can offset a weak replacement market by taking domestic share while expanding internationally," the analyst wrote in a client note.
He maintained a "Buy" rating and $42 price target.
Goldman Sachs' Steven Kent also liked the company's international efforts and approved of its decision to name Chief Executive Brian Gamache to the additional role of chairman to succeed the retiring Louis Nicastro.
"This appointment illustrates the board's commitment to Brian Gamache and shows its appreciation of Gamache's turnaround of WMS," he said.
Shares of WMS Industries gained $2.75, or 7.8 percent, to $37.92. The stock has traded in a range of $24.55 to $41.23 over the past 52 weeks.
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