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Light & Wonder (LNW) Q4 Earnings Miss Estimates, Top-Line Up Y/Y

Light & Wonder, Inc. LNW, reported mixed fourth-quarter 2022 results, with the bottom line missing the Zacks Consensus Estimate but the top line beating the same. The Las Vegas-based cross-platform games and entertainment company reported higher revenues year over year, driven by strong momentum in Gaming segment and record net sales growth in the SciPlay segment.

Bottom Line

Net income from continuing operations declined to $21 million or 12 cents per share from $62 million or 60 cents per share reported in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate by 25 cents. Despite top-line improvement and higher operating income, income tax expense of $5 million against an income tax benefit of $154 million led to lower income year over year.

For 2022, the company witnessed a loss of $176 million or a loss of $2.09 per share from continuing operations against a net income of $24 million or 6 cents per share in the year-ago quarter.

Light & Wonder, Inc. Price, Consensus and EPS Surprise

 

Light & Wonder, Inc. price-consensus-eps-surprise-chart | Light & Wonder, Inc. Quote

 

Revenues

Total revenues in fourth-quarter 2022 rose to $682 million from $580 million in the prior-year quarter, driven by growth in all business segments. The top line beat the consensus estimate of $656 million.  Services revenues increased to $466 million year over year from $425 million, while product sales grew 39.4% to $216 million from $155 million in the prior-year quarter.

Gaming revenues surged 18% year over year to $438 million from $372 million in the year-ago quarter. Solid growth in Gaming machine sales and positive demand trends for Gaming operations, systems and tables supported the top-line gain from this segment.

Revenues from SciPlay witnessed a record 18% growth year over year to $182 million, primarily driven by the core social casino business and the Alictus acquisition.

iGaming revenues increased to $62 million from 54 million in the prior-year quarter. Improvement in this segment was driven by growth in the U.S. market.  

In 2022, revenues stood $ 2,512 million compared with previous year figure of $2,153 million.

Other Details

Non-GAAP consolidated AEBITDA was $265 million compared with the prior-year quarter’s level of $216 million, up 23% year over year driven by growth in the Gaming business. AEBITDA margin was 39%, slightly higher than 37% reported in the year-ago quarter.

Cash Flow & Liquidity

In 2022, the company utilized $381 million of cash in operating activities against a cash flow of $685 million a year ago. As of Dec 31, 2022, it had $914 million in cash and cash equivalents with $3,870 million of long-term debt, compared with respective figures of $585 million and $8,646 million in 2021.

Zacks Rank & Stocks to Consider

Light and Wonder currently carries a Zacks Rank #3(Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Juniper Networks, Inc. JNPR, carrying a Zacks Rank #2(Buy), has an Earnings ESP of +0.89%. Earnings estimates for JNPR for the current year stands at $2.26 per share.

Juniper Networks, Inc. is a leading provider of networking solutions and communication devices. The company develops, designs and sells products that help to build network infrastructure used for services and applications based on single Internet protocol network worldwide.

Viavi Solutions Inc. VIAV, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 9.10%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 27.27%.

Viavi Solutions Inc. is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks.

Arista Networks, Inc. ANET, sporting a Zacks Rank #1, delivered an earnings surprise of 14.17%, on average, in the trailing four quarters. Earnings estimates for ANET for the current year stand at $5.76 per share.

Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.

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