Stargames Deal Hits Shuffle Master

The stock slides 6%.
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Shuffle Master (SHFL) shares were down 2% after hours, hit by losses tied to the gaming equipment maker's Stargames unit.

The Las Vegas-based company lost $12.7 million, or 37 cents a share, reversing a year-ago profit of $6.8 million, or 19 cents a share. The latest quarter was hit by a 55-cent writedown on the Stargames buy and a 3-cent loss from Stargames' operations. Excluding those costs, the latest-quarter profit was 21 cents a share, a penny shy of the Thomson Financial estimate.

Revenue rose to $43.3 million from $27.1 million a year earlier, beating the $38 million Thomson analyst consensus.

"We are pleased with our second-quarter performance, in particular with the quality and size of our revenue growth," CEO Mark Yoseloff said. "Revenue was driven by outstanding sales results in all categories, including our newly-acquired Stargames products. Having closed the acquisition during the quarter, we are now ideally positioned in the fastest growing gaming region in the world, the Pacific Rim, with an expanded product portfolio that targets the entire casino floor. In addition, Shuffle Master now possesses the critical first-mover advantage in the multi-player, electronic-wagering format that provides increased profits for casinos and a fast-paced, more exciting playing experience. All-in-all, we have never been better positioned for sustained, long-term growth."

The company said it expects to make $1.02 to $1.05 a share for the year, excluding Stargames and stock costs. Analysts are looking for 96 cents.

Shares fell $2.21 late Thursday to $34.55.