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Why Is Light & Wonder (LNW) Up 2.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Light & Wonder (LNW - Free Report) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Light & Wonder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Light & Wonder Q1 Earnings Match Estimates, Top-Line Up Y/Y
Light & Wonder reported solid second-quarter 2023 results, with the bottom line and the top line beating the respective Zacks Consensus Estimate. The Las Vegas-based cross-platform games and entertainment company reported higher revenues year over year, driven by record net sales of SciPlay and iGaming segments.
Bottom Line
Net loss in the reported quarter was $1 million or a loss of a penny per share against a net income of $3,291 million or $34.61 per share in the year-ago quarter. Despite top-line growth, the significant decline was primarily attributable to income from discontinued operations in second-quarter 2022. Non-GAAP net income was $1.02 per share, which beat the Zacks Consensus Estimate by 69 cents.
Revenues
Total revenues in the second quarter of 2023 rose to $731 million from $610 million in the prior-year quarter, propelled by growth in all business verticals. The top line beat the consensus estimate of $674 million. Services revenues increased to $496 million year over year from $445 million, while product sales were $235 million, up from $165 million in the prior-year quarter.
Gaming revenues were $471 million, up 21% year over year, driven by 41% sales growth of gaming machines, and healthy demand trends in gaming operations and gaming systems. Revenues from SciPlay surged to $190 million from $160 million in the year-ago quarter. The 19% year-over-year growth was mainly propelled by the core social casino business. The average revenue per daily active user increased to a record high tally of 93 cents, up 26% year over year. Greater engagement, monetization for players enhanced the top line from this segment. iGaming revenues increased to $70 million, up 17% from the prior-year quarter, driven by a 32% improvement in the U.S. market.
Other Details
Non-GAAP consolidated AEBITDA was $281 million compared with $212 million in the prior-year quarter with improvement in all business verticals. AEBITDA margin rose to 38% from 35% reported in the year-ago quarter.
Cash Flow & Liquidity
For the first six months of 2023, the company generated $219 million of cash from operating activities compared to $13 million in the year-ago period. As of Jun 30, 2023, it had $909 million in cash and cash equivalents with $3,863 million of long-term debt.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -9.59% due to these changes.
VGM Scores
Currently, Light & Wonder has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Light & Wonder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Light & Wonder (LNW) Up 2.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Light & Wonder (LNW - Free Report) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Light & Wonder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Light & Wonder Q1 Earnings Match Estimates, Top-Line Up Y/Y
Light & Wonder reported solid second-quarter 2023 results, with the bottom line and the top line beating the respective Zacks Consensus Estimate. The Las Vegas-based cross-platform games and entertainment company reported higher revenues year over year, driven by record net sales of SciPlay and iGaming segments.
Bottom Line
Net loss in the reported quarter was $1 million or a loss of a penny per share against a net income of $3,291 million or $34.61 per share in the year-ago quarter. Despite top-line growth, the significant decline was primarily attributable to income from discontinued operations in second-quarter 2022. Non-GAAP net income was $1.02 per share, which beat the Zacks Consensus Estimate by 69 cents.
Revenues
Total revenues in the second quarter of 2023 rose to $731 million from $610 million in the prior-year quarter, propelled by growth in all business verticals. The top line beat the consensus estimate of $674 million. Services revenues increased to $496 million year over year from $445 million, while product sales were $235 million, up from $165 million in the prior-year quarter.
Gaming revenues were $471 million, up 21% year over year, driven by 41% sales growth of gaming machines, and healthy demand trends in gaming operations and gaming systems. Revenues from SciPlay surged to $190 million from $160 million in the year-ago quarter. The 19% year-over-year growth was mainly propelled by the core social casino business. The average revenue per daily active user increased to a record high tally of 93 cents, up 26% year over year. Greater engagement, monetization for players enhanced the top line from this segment. iGaming revenues increased to $70 million, up 17% from the prior-year quarter, driven by a 32% improvement in the U.S. market.
Other Details
Non-GAAP consolidated AEBITDA was $281 million compared with $212 million in the prior-year quarter with improvement in all business verticals. AEBITDA margin rose to 38% from 35% reported in the year-ago quarter.
Cash Flow & Liquidity
For the first six months of 2023, the company generated $219 million of cash from operating activities compared to $13 million in the year-ago period. As of Jun 30, 2023, it had $909 million in cash and cash equivalents with $3,863 million of long-term debt.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -9.59% due to these changes.
VGM Scores
Currently, Light & Wonder has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Light & Wonder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.