Some of our positions struggled to keep pace with the market during the quarter. Gaming manufacturer International Game Technology (IGT) fell –16.50% after an earnings miss. The company delivered $0.23 in earnings per share from $533 million in total revenue; the Street had been expecting $0.28 in EPS and 6% higher revenues. The company sees these results as a seasonal bump in the road. When it released the earnings report, it reiterated its full year guidance of $0.98 to $1.04 in earnings per share. Over the short term, the company's revenues, and therefore its earnings, are likely to bounce around a bit, especially in an uncertain economic environment in which casinos are unsure how to maneuver. Long-term, however, we continue to believe gaming is a secular growth area and see IGT as a leader in its niche. In the meantime, we applaud management's decision to take advantage of the company's bargain stock price via share repurchases. After announcing a new buyback program in mid-June, the company repurchased 23 million shares—more than 7% of shares outstanding—within seven weeks.
From Ariel Funds' third quarter commentary.