After a long time of slow business, Las Vegas’ leisure demand has started to improve along with a gradual recovery of the US economy. The companies that were able to withstand the bad times will be the ones in condition to profit the most. However, fierce competition and a variety of options are always a threat to increasing earnings.
Let’s take a look at three players in the gaming industry.
International Game Technology: Growth perspectives for an industry leader
International Game Technology (NYSE:IGT) is a global gaming company specializing in the design, development, manufacture, and marketing of electronic gaming equipment and systems products, including online and mobile solutions.
The company’s EPS of $0.28 was better than expected, despite an operating margin contraction. International Game Technology (NYSE:IGT) has a dominant position in the industry, defended by innovative and technologically advanced products. However, the company is expected to experience increasing operating costs derived from management’s plans to increase investments in product development. This will affect the company’s profitability going forward.
As a supplier, International Game Technology (NYSE:IGT) requires a healthy economy that can ensure equipment renewals from its clients. As the economy improves rising demand for advanced slot machines and clients willingness to develop new games gives the company growth perspectives. Thumbs up for International Game Technology (NYSE:IGT)’s future.
Wynn Resorts: Recovering along with the industry
Wynn Resorts, Limited (NASDAQ:WYNN), the leading developer, owner and operator of casino resorts in Las Vegas and in Macau (China).
The company’s first-quarter EPS reached $2.03, 52.6% higher than the prior year’s. Wynn Resorts, Limited (NASDAQ:WYNN) is profiting from solid business in Las Vegas and a recovery in Macau’s mass market category. Management’s policy of not using credit as a marketing tool allows Wynn Resorts, Limited (NASDAQ:WYNN) to maintain highly successful credit standards. I believe this policy is correct and in line with the strategy towards premium rate gaming relative to overall gaming.
The company has been able to survive the downturn in the business and can profit from a stronger revival in the US economy. In addition, Wynn Resorts, Limited (NASDAQ:WYNN) has approvals to build its Cotai project and expects to finish it before Chinese New Year 2016, which should boost its top line.