Chapter 4 – Revenue Recognition

Slot machine-maker IGT profit rises 7 pct

Summary:
Slot machine maker International Game Technology (IGT.N) posted a 7 percent rise in quarterly profit as some of its casino customers coming back from the recession replaced old machines. Chief Executive Officer Patti Hart, speaking on a conference call on Thursday, said “IGT remains cautiously optimistic, but is more enthusiastic about specific metrics including an uptick in play levels.” She adds, “Gaming operations revenue rose 5 percent from the previous quarter, reflecting a slight increase in play levels, while replacement slot machine sales improved 37 percent over the same comparison period.”

Revenue Recognition:
Chapter 4 mentions many times about revenue recognition and how it works, I thought that IGT would have a bright future because gambling and gaming is always a sector that will generally improve in the future. With more casinos opening and older casinos purchasing new slot machines, etc. IGT is doing very well in terms of profits and stock price increases. IGT has not received any complaints regarding the accounting principles and their income report seems to highlight this.

Reflection:
After doing a assignment on reporting bad accounting practices for major companies (such as Squibb Myers), I wanted to write a little bit about companies that follow good accounting practices and are legitimately successful. "An improvement in replacement units shipped, an increase in gaming operations yields and a decline in SG&A (sales, general and administrative costs) all reflect IGT's continued efforts to navigate our business through an operating environment which remains challenging," Hart said in a statement. And now with more and more casinos and venues opening up in many different parts of the world (Macau in China for example) I think that companies like IGT will experience more profit gains in the future.