Yahoo Finance Playtech says full-year profit to drop below market view
(Reuters) - Playtech Plc said on Friday it expects its full-year adjusted core earnings to fall a touch below market consensus as its financial trading division took a hit, but the gambling software maker reported strong growth in its core gaming units.
The company had forecast in August its full-year adjusted core earnings to come in between 390 million euros ($430.95 million) and 415 million euros.
"Following a positive start to the second half, trading conditions in TradeTech have been highly challenging during September and October," the company said, adding that it would be reviewing all options for the division which develops technology for financial trading.
Shares in the FTSE 250 company fell as much as 7% in early deals before paring losses to trade flat at 0854 GMT.
Playtech, however, reported strong growth in its other core gaming divisions.
"We argue that investors should take comfort from the core performance, with the non-core areas likely to be exited in due course," Jefferies analysts said, but cut their core earnings estimate.
The company said it is reviewing options for its casual and social gaming business, which has games based on TV shows such as Narcos and Breaking Bad, including a possible sale of all or part of the unit.
The company had also cut its full-year revenue forecast for Asia, as the company faced a clamp-down on gambling syndicates in one of its largest Asian markets, Malaysia, and seen new players in China offering services at lower prices.
Playtech had said first-half core earnings in TradeTech dived 67.5% to 8.2 million euros due to low market volatility.
The CBOE volatility index, considered Wall Street's fear gauge, has fallen since August, when U.S.-China trade tensions peaked. This indicates muted trading, largely due to whipsawing sentiment over trade negotiations and lack of clarity over Brexit, which has kept traders on the sidelines.
($1 = 0.9050 euros)
(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shailesh Kuber and Sherry Jacob-Phillips)
