Scientific Games likely to exceed EBITDA estimates in 15Q3/Q4

Sterne Agee says Scientific Games is on track to at least meet, though more likely exceed, 15Q3 and 15Q4 consensus EBITDA estimates.

Analyst David Bain said in a note that visible 15Q3/15Q4 cost synergies and revenue drivers show consensus EBITDA estimates as conservative when using 15Q2 as a baseline.

“We believe 3Q15/4Q15 costs savings should be ~$7.9m/~$11.5. In other words, SGMS should meet or exceed 3Q15 and 4Q15 EBITDA consensus estimates just from executing its cost synergy goals.”

Bain added that versus 15Q2 results, this year’s remaining quarters should also benefit from $10.5 million/$8.8 million of visible EBITDA drivers.

“Visible EBITDA increases versus 2Q15 include the partial sales of SGMS’ announced 3,000 self-service sports betting terminal order from Ladbrokes, 500 domestic unit orders that slipped to 3Q15 for delivery from 2Q15, initial sales from its 2,000 Oregon Lottery terminal order and stronger international sales driven by the Dualos cabinet.”

 

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