3. WMS Industries serves the gaming industry worldwide by designing, manufacturing and marketing games, video and mechanical reel-spinning gaming machines, video lottery terminals and gaming operations at legal gaming venues.
Net revenue for 2011 second quarter was increased 5.8% year-over-year to $199.9 million, driven by a 12% increase in product sales revenues to $127.2 million. A 1.4% decline in global new unit shipments was more than offset by an 8% increase in the average selling price, reflecting strong customer demand for premium-featured Bluebird 2 and Bluebird xD gaming machines and higher sales of used gaming machines. Net income increased marginally to $27 million or 46 cents per share from $26.5 million or 44 cents per share in the year-ago quarter.
During 2010, the company expanded by launching directly into Class II gaming markets in the United States and entering the Mexican and New South Wales, Australia markets. The company had previously served these markets through third-party content licensing agreements for its game themes. The company expects to further penetrate these new markets and expand its distribution channels in 2011.Going forward, the company forecasts revenue of $209-$215 million for the third quarter of 2011, representing 6%-9% growth over the comparable prior year quarter. In addition, the company reiterated its full year 2011 revenue guidance of $830-$850 million, implying 8%-11% growth over the prior year. Of the twenty analysts covering the stock, 70% recommend a buy, while 25% rate a hold. On average, analysts estimate an upside of 39% to $49.88 in value from current levels.
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