DOW JONES NEWSWIRES WMS Industries Inc.'s (WMS) fiscal fourth-quarter profit grew 18% on higher revenue and lower operating costs, though gross margin slipped. The maker of slot machines, lottery terminals and videogame machines forecast revenue growth for the new year of 8% to 11%, while analysts estimated 11% growth to $852 million, according to a poll by Thomson Reuters. Gambling-equipment makers have seen lower sales during the recession as gamblers wagered less or stayed away from casinos altogether. But WMS, which has been increasing market share, is expected to benefit as the industry recovers in the next couple of years and casino operators order more machines. Last week, rival International Game Technology (IGT) reported its quarterly profit climbed 52% on tax-related gains but revenue, which slid 5.3%, fell short of Wall Street's expectations. For the quarter ended June 30, WMS reported a profit of $33.6 million, or 56 cents a share, matching analysts' expectations and up from $28.4 million, or 49 cents a share, a year earlier. Revenue increased 9% to $213.4 million. In April, the company forecast $213 million to $223 million. Gross margin fell to 63.8% from 64.6%, but that was more than offset by operating costs rising just 5.9%. Product sales, which provided nearly two-thirds of total revenue, grew 11%, and the average selling price increased 4.8%. New units sold rose 1.6%. Meanwhile, revenue from operations in which the company places machines on a casino floor and shares the proceeds with the casino operator increased 6.5%. The average installed base grew 3.6%. WMS's shares closed at $39.82 and were inactive after-hours. -By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com
