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PartyGaming Sales Stagnate on Dollar, Poker Slowdown (Update3)
By Louisa Nesbitt
Nov. 19 (Bloomberg) -- PartyGaming Plc, the owner of the PartyPoker online-gaming brand, reported stagnant third-quarter sales after the dollar strengthened and competitors that still take bets from the U.S. lured poker players away.
PartyGaming slid 3.1 percent in London trading. Sales were $117.7 million, the Gibraltar-based company said today in a statement, little changed from $118 million a year earlier and below Deutsche Bank AG's $119 million estimate. The company is ``confident'' of meeting the consensus of analysts for boosting annual profit, the statement shows.
Gains by the dollar, PartyGaming's reporting currency, pinch its growth by eroding the value of the sales it generates in other monies. The dollar climbed in the quarter as market turmoil sparked a rush for the safety of Treasury debt. Web gamblers tend to favor sites with the most activity, putting PartyGaming at a disadvantage against competitors that still deal with Americans.
``We are seeing a trend across the online industry of poker being weak, but sports betting, bingo and casino strengthening,'' Mark Brumby, an analyst at Blue Oar Securities in London, said in a research note.
Poker Customers
Revenue from poker, the main sales generator, fell 15 percent overall in the quarter and dropped 6.6 percent in the six weeks after the period ended on a gross daily basis, the statement shows. The number of new poker customers slid 12 percent in the quarter from the prior three months, partly because of deferred marketing spending.
PartyGaming fell 3 pence to 95 pence. The shares cost 116 pence each when the company went public in June 2005 and would trade below 10 pence now if not for a 1-for-10 reverse split in May of this year.
Web-gaming companies also face a spending slowdown as higher food and energy bills sap incomes and plunging stock prices erase wealth and hurt confidence. World economic conditions contributed to a slowdown in sales growth unveiled this week by 888 Holdings Plc, whose Pacific Poker competes with PartyPoker.
``The macroeconomic challenge we face is certainly more marked than everyone predicted in the summer,'' Jim Ryan, PartyGaming's chief executive officer, told journalists on a conference call. ``Online gaming is likely to be resilient, but not immune to the economic downturn.''
U.S. Discussions
He also said the company is still in talks with the U.S. Justice Department on past activities in the country, which barred offshore Web gaming in 2006. Discussions began last year as industry concern spread about possible legal action against companies that took bets from Americans before the crackdown.
PartyGaming expects to be one of the first companies to take part in industry consolidation once the talks with U.S. authorities are resolved, Ryan said on the call. That may involve a ``transformational acquisition,'' he said, without going into detail.
Third-quarter poker sales fell to $65 million from $76.3 million a year earlier. Revenue from casino games increased 25 percent to $45.9 million, while sports-betting sales rose 19 percent to $5.1 million.
Bingo revenue more than doubled to $1.7 million on growth in the U.K. PartyGaming runs local Web sites carrying the brand of television broadcaster ITV Plc, which concluded its ``Bingo Night Live'' interactive show this month by giving away a jackpot worth 25,000 pounds ($37,500).
PartyGaming gets almost half its sales from Germany, Canada and the U.K. The U.S. Dollar Index, which measures the currency's value against a basket of six other monies, gained almost 10 percent in the third quarter.
The dollar added 12 percent against the euro and sterling in the period and increased 4.1 percent against its Canadian counterpart, data compiled by Bloomberg shows.
Analysts expect PartyGaming to raise so-called clean earnings before interest, tax, depreciation and amortization by 26 percent for the year. |
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发表于 2008-11-20 06:50
