Flutter lowers full year earnings forecast, shares tumble

By Padraic Halpin

DUBLIN (Reuters) -Flutter expects recent customer friendly sports results to push full-year earnings excluding the nascent U.S. market to the bottom of its previously forecast range, sending shares in the world's largest online betting company sharply down on Thursday.

Flutter also said weakness in the Australian horse racing market is set to continue into 2024 after third quarter revenues there fell 7% year-on-year on a constant currency basis. Reported group revenues were up 8% or 13% in constant currency terms.

Shares in the Paddy Power, Betfair and Fanduel owner, up 21% this year before the trading update, were down 11% in early trading.

Flutter said in August that it expected full-year adjusted ex-U.S. core profit to rise to between 1.44 billion and 1.6 billion pounds ($1.77 billion to $1.97 billion).

A winning streak for gamblers in September and October cost 50 million pounds with adverse foreign exchange movements adding a further 30 million pound hit.

Flutter became the first online betting operator to turn a profit in the United States in the first half and said on Thursday that it expects full-year U.S. earnings of 140 million pounds versus its previous estimate of 90 million to 190 million pounds.

Analysts polled by Refinitiv had expected total core profit of 1.65 billion pounds versus the 1.58 billion Flutter guided on Thursday.

"Overall, this is a disappointing update from Flutter," Goodbody analyst David Brohan wrote in a note.

Rival 888 Holdings lowered its annual core profit expectations in September after a 10% decline in third-quarter revenue while Ladbrokes owner Entain also warned on annual and third-quarter online net gaming revenue.

Flutter's gaming revenue far outperformed sports betting in the quarter. Overall revenue in its largest division, U.S. market-leading brand Fanduel, rose 20% on a constant currency basis, compared with first-half growth of 63%.

Revenue also increased by a softer 19% in its international division, which is led by Italian market leader Sisal. UK and Ireland revenue was up 11% where Flutter said it continued to take market share.

The Dublin-based group also announced plans to delist from Euronext Dublin when it adds a New York listing early next year, the latest blow for the Irish bourse following the recent exit of building materials giant CRH and imminent departure of packaging group Smurfit Kappa.

($1 = 0.8139 pounds)

(Reporting by Padraic Halpin;Editing by Mark Potter, David Goodman and Emelia Sithole-Matarise)