Gtech's Third Quarter Earnings Fall 20%

Gtech Holdings Corp. reported a 20% decrease in third quarter earnings Thursday. The lottery systems operator attributed the losses to declines in overseas lottery revenue.

The company, which is trying to sell its one-third interest in Turfway Park, reported $18.3 million in earnings down from $22.8 million during the third quarter of 1999. Earnings per diluted share dropped 18% to 53 cents down from 65 cents per share for the same period a year ago. Third quarter revenue fell 11.4% to $221 million from $249.6 million.

Gtech cut its operating costs by 17% for the quarter and promised analysts during a conference call that more cuts were coming. Bruce Turner, Gtech's chairman, said further cost-cutting is needed to make the company more competitive when it re-bids for lottery contracts in Texas and California.

Turner also said the company would be taking a one-time charge in the fourth quarter but didn't give specifics. He did say he expected the charge would be offset by the sale of assets. One asset could be the company's share in Turfway Park, but nothing is definite, according to Robert Vincent, Gtech's vice president of corporate communications.

"We are looking at the fourth quarter or soon after," Vincent said. He added that partners Keeneland Association and Harrah's have a first right of refusal for Gtech's share, which is owned by a subsidiary called Dreamport.

"We're still talking to our partners," Vincent said. Gtech's fourth quarter ends Feb. 28.

Gtech operates about 70% of the world's lotteries. In August it announced it was restructuring and would layoff 4% of its workers. The company's stock (NYSE:GTK) closed 0.3% higher at $19.19 on Thursday.