(IGT article updated with movement in shares of IGT.)
NEW YORK (
International Game Technology
is exiting the Japanese market.
The slot-machine maker said Thursday that it will shutter its Japanese operations by the third quarter.
The Japanese market has been a strain on IGT's business for several years, as legislation there has made slot machines less desirable to gamblers.
In 2009, IGT shipped just 3,775 units to Japan, compared with 6,000 in 2008 and 29,800 in 2007, Joseph Greff, J.P. Morgan analyst, wrote in a note.
IGT expects the closure to result in a $20 million charge, which it will recognize in the second and third quarters.
Greff still recommends IGT stock, as well as that of its rivals
"Given the capital investment required for business, as well as the minimal earnings impact, we do not see the decision to end operations as a negative impact of the IGT story," Greff wrote. "In short, we believe a more streamlined focus on traditional slot product, as well as the removal of the cost overhand associated with the business, as being a positive going forward."
Shares in IGT are up 2.3% to $18.11 approaching midday Thursday.
-- Reported by Jeanine Poggi in New York.
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