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Gtech Revenue Down, Earnings Up for Q2

Adjusted for the new accounting rule which no longer allows for the amortization of goodwill, net income for the year-ago period was $18.1 million, or 30 cents a diluted share.

Lottery operator Gtech Holdings Corp.'s latest second-quarter earnings soundly beat a Thomson First Call consensus estimate of 47 cents a share, as well as its own projections for second-quarter earnings of 46 cents to 50 cents a share.

The company said product margins jumped to 56.1% during the latest quarter versus 12.2% in the year-ago period. Interest expense declined 57.7% to $3.7 million from $6.4 million last year, primarily due to lower debt balances and interest rates reduced during the company's fourth-quarter debt restructuring.

Gtech again boosted its earnings and revenue projections for its fiscal year ending Feb. 22, 2003, buoyed by expectations that service revenue will grow 2% to 3% in the period, instead of 1% to 2% as projected in June.

The company now sees fiscal 2003 earnings of $2.10 to $2.20 a diluted share, up from its June projection of $1.70 to $1.80 a diluted share, and above First Call's consensus estimate of $1.80 a share.

Gtech maintained its guidance for 2003 product sales of $90 million to $110 million.

For the third quarter ending Nov. 23, Gtech introduced earnings guidance of 47 cents to 52 cents a share, based on product sales of $46 million to $48 million and service revenue growth of 4% to 5% over last year.

In the year-ago third quarter, the company recorded earnings of 37 cents a share, adjusted for the May stock split, on revenue of $263.6 million. Company representatives weren't immediately available to provide split-adjusted net income figures for fiscal 2002. Revenue reached $1.01 billion in the year ended Feb. 23, 2002.

Gtech Holdings Corp. - West Greenwich, R.I.
   2nd Quar Aug. 24:
                        2002             2001
Revenue             $220,958,000     $236,584,000
Net income            38,207,000       16,636,000
Shr earns (basic)
 Net income                  .67              .28
Shr earns (diluted)
 Net income                  .66              .28

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