While many continue to struggle with lower consumer spending, WMS saw record increases, however missed the predicted revenue mark.

Net income for the period ending June 30, increased 18% to $33.6 million or $0.56 a share. Analysts on average were predicting $0.56 a share on revenue of $217 million. However total revenue increased 9% to $213.4 million, falling just below.

Product sales for the quarter increased 11%, the average selling price increased 4.8% and the number of new units sold increased 1.6%, while casino revenue increased 6.5% and the average installed base increased 3.6%.

WMS also informed shareholders during a conference call to discuss the earnings, that the board of directors has approved a new share repurchase program, that will allow up to $300 million worth of stock to be repurchased within the next three years.

After the market closes on Tuesday August 3, 2010, WMS Industries is expected to release its fiscal fourth quarter results.

Analysts are expecting WMS to report earnings of $0.56 a share on revenue of $217 million for the quarter and full year earnings of $1.85 a share.

In the fiscal third quarter ending March 31, WMS was expected to report earnings of $0.49 a share but came in just above at $33 million or $0.55 a share.

However Investors may be showing signs of comfort, with the stock rising 5.48% during the afternoon trading session to close the market at $40.62.

WMS Industries has been engaged in a legal dispute with the insurance company over the interpretation of a business interruption insurance policy under Mississippi law resulting from Hurricane Katrina in 2005.

WMS believes that they should be covered for an insurance claim made after the hurricane struck the Gulf Coast resulting in a loss of business for WMS’s wide-area progressive slot machines which is central monitored at Premises 24 in Mississippi and connected to casinos throughout the region. The insurance company is arguing that only a portion of the policy was payable for damages that occurred to the monitoring station and that the bulk of WMS’s lost income was the result of local casinos not being able to reopen for some time.

A bench trial resulted in a ruling favoring Federal Insurance Co, however WMS is attempting to appeal.

Lipton will take over the role, effective immediately and brings more than 25 years of global marketing leadership and client knowledge to the gaming developer.

Lipton will fill the role previously held by Rob Bone who was appointed Vice President and General Manager, Western Sales and Operations for WMS earlier this year. Lipton will also serve on the company’s Executive Committee.

Orrin J. Edidin, President of WMS said, “Amy brings to WMS a track record of significant accomplishments in global entertainment and ‘new media’ marketing programs and broad perspectives on how social-media can play an important role in shaping the future of gaming experiences through player-driven interaction and the power of innovative networked gaming solutions. Combining this expertise with her digital media and network technology experience will be instrumental in guiding WMS’ future strategy as the leader in innovating compelling gaming experiences.”

Amy Lipton commented on her appointment, “I am excited to be joining a company that has clearly established itself as an industry leader in innovation and the development of imaginative player-centric games and experiences that drive high returns for casino operators. WMS is passionate about its creativity and innovation with a purpose, and this has allowed the Company to develop exciting, differentiated games that consistently exceed the entertainment experiences previously available to slot players. I look forward to working with Orrin, Larry and the entire WMS team, as we continue on the leadership path for the evolution of entertainment experiences on the casino floor.”

WMS closed the market yesterday with a price of $44.88 and opened today at $45.60, gaining $0.72 after hours. The stock is currently trading up $1.45 or 3.23% to $46.33.

Although WMS has fallen approximately $3.00 or 6.29% in the past month and is currently trading below its 20 day and 50 day moving averages, it is above its 200 day moving average.

During the past month the stock has outperformed the Resorts and Casino industry, which has fallen 13.72%.

One month ago, WMS Industries released their quarterly financials showing a profit of $0.49 per share, just a penny shy of analysts’ expectations of $0.50 per share.

The stock is currently trading between $44.68 and $46.42.

For the quarter ending March 31, the game developer reported a profit of $33 million or $0.55 per share, including a $0.06 tax benefit, up from $24.4 million or $0.43 per share in the same period a year earlier, surpassing analysts’ expectations of $0.49 per share.

Revenue rose 9.2% to $197.5 million falling within the company’s January forecast of $195 million to $205 million.

Sales of machines grew by 8.7% and the average selling price increased 8% while shipments of new units rose 3%.

WMS also has operations where proceeds are shared between the company and the casino operator that increased 10% while the average installed base grew by 5% to just over 10,000 machines.

Analysts had forecast some improvement in the equipment sector after gambling revenue dropped sharply during the recession, but Goldman Sachs last month said some states that had announced plans to permit gambling may move slower than expected, delaying a recovery until 2011.

Analysts, on average, expect WMS Industries to report earnings of $0.49 a share on sales of $204 million. For the full year, analysts expect the company to post EPS of $1.85 a share.

In the year-ago period, the company reported EPS of $0.43 on sales of $181 million meeting consensus estimates.

Last month J.P. Morgan analyst, Joseph Greff told clients that he anticipated seeing “revenue acceleration starting in the calendar of the second quarter of 2010.”

WMS is poised for growth over the next two years as they wait for regulatory approval to enter the Australia gaming market and focusing on expanding gambling in Illinois.

In the past month shares of the casino game developer has returned 20% as of Friday’s closing price of $49.07.

WMS Industries is currently above its 50-day moving average of $41.33 and above its 200-day moving average of $41.15.

The major game developer for the casino industry announced today that in the past 20 months that the companies two Adaptive Gaming enabled slot games STAR TREK(TM) and Reel ‘em In(R) Compete to Win(TM) games have been offered, an average of 2,000 new log-ins have been generated per day from more than 260 gaming venues.

Brian R. Gamache, Chairman and CEO of WMS, commented, “The enormous popularity of our Adaptive Gaming platform highlights WMS’ Player Driven Innovation(TM) approach to game design and the value of our game changing technologies which provide players with tremendous entertainment value unique to the industry. Slot players today have more options than ever before and, as such, surpassing one million unique log-ins and generating a high percentage of repeat players for our Adaptive Gaming products is clear evidence that WMS continues to create differentiated, broadly-accepted gaming products that offer players the gaming content they want to play again and again. The result is greater player appeal with more entertainment value that in turn creates significant value for our customers and for WMS.”

The platform is unique in the gaming industry and provides players the ability to unlock new features and save their progress in video slot games that offer players so much more than spinning cherries.

The gambler can easily resume their game at a later time and even from a different casino through the Adaptive Gaming system.

This summer, WMS will launch the next-generation version of the platform with games based on the The Lord of the Rings ™ motion picture trilogy.

While, WMS reported record results in its second fiscal quarter, shares of the gaming company have dropped 16%.

Greff adds that the stock price decline “presents an opportunity in front of revenue acceleration starting in the calendar of the second quarter of 2010.”

WMS is poised for growth over the next two years as they wait for regulatory approval to enter the Australia gaming market, where WMS executives say there is significant opportunity.

WMS is also focusing on Illinois as they move forward with a gaming expansion that will allow a tenth casino in the state.

Brean Murray also upgraded his rating on WMS stock to a “buy” on Wednesday with a target price of $51.00.

“With the potential for WMS’s participation base to increase following flattish results over the past two quarters and with the most leverage to industry replacement sales, which should dominate the sales landscape for the next few quarters, we view the recent 20% slide in WMS shares as a compelling investment opportunity.”

WMS opened trading today at $39.42 up $1.43 from yesterday’s close of $37.99.

WMS stock reached a high of $44.21 in mid January and a low of $36.94 at the end of the month.

Under the terms of the agreement, FutureLogic’s GEN2 Universal printer will be the preferred printer in WMS gaming platforms.

The companies have also agreed to combine forces on strategic marketing initiatives and new printer applications for next generation games.

WMS is committed to evolving the casino slot floor to a networked environment to benefit the player experience and has chosen the Gen 2 universal printer based on Futurelogic’s dedication to the advancement of TITO printer and networked gaming technologies.

“FutureLogic’s reputation for innovation, as well as their leadership in the evolution of network-enabled peripherals and their work in supporting our customers’ initiatives, is precisely what we seek in our technology partners,” said Bruce Frey, Vice President of Global Sourcing and Planning for WMS Gaming, Inc.

“We are proud to have entered into this strategic agreement with WMS Gaming, their affiliates, distributors and sales channel partners,” said Nick Micalizzi, FutureLogic’s VP of Domestic Sales & Marketing. “We look forward to supporting their expansion and development programs via the continuous development of world class printing and networked gaming solutions.”

In addition, WMS raised its guidance for fiscal 2010 total revenues to a range of $765 million to $785 million compared with prior annual guidance of $760-to-$780 million and initiated fiscal 2010 third quarter revenue guidance of $195 million to $205 million.

Total revenues increased 6% to a second quarter record $188.9 million.

Gaming operations revenue grew 20%, as the average installed participation footprint increased 9% to a record 10,357 gaming machines and the average daily revenue rose 13% to $75.23 per participation unit, another fiscal second quarter record.

Net income rose to $26.5 million, or $0.44 per diluted share compared to $0.41 per diluted share in the December 2008 quarter, which benefited from a $0.05 per diluted share gain from settlement of trademark litigation and a $0.02 per diluted share benefit from the retroactive reinstatement of the research and development tax credit.

“WMS’ record fiscal second quarter results again highlights the value of our distinctive culture of innovation, emphasis on creating differentiated products and focus on simultaneously advancing our operating execution. Our expanding portfolio of innovative products offer high player appeal, consistently generating high earnings performance for our customers that is driving strong growth in our gaming operations business and overall increases in WMS’ share of the casino slot floor.” said Brian R. Gamache, Chairman and Chief Executive Officer.

WMS will demonstrate products specifically addressing international markets as well as nearly 80 games for the global market.

Many of these games will be featured on the Bluebird2 gaming platform. The Bluebrid2 was debuted for international customers at the IGE 2009 and continues to gain increasing traction in global markets since its introduction in late 2008.

In addition, The Bluebird xD gaming cabinet will also be debuted for international clientele.

The Bluebird xD features engineered advancements in cabinet functionality designed to take advantage of the game content enhancements enabled by networked gaming applications and establishes a new level of player entertainment experience.

“WMS’ success in leveraging our ‘Culture of Innovation’ to drive the development of products that simultaneously deliver measurable value for casino operators and new gaming experiences for players will be readily apparent to attendees at IGE 2010,” said Brian R. Gamache, chairman and CEO of WMS. “Our ability to address the specific needs of an increasing number of international markets with technology platforms and a broader portfolio of games is driving our international market share gains. The result is more WMS and Orion games on casino slot floors around the world than at any time in our history.”

Last month WMS Industries signed a deal with Betson, a coin-operated video game and vending machine distributor to exclusively distribute WMS products to licensed locations such as bars, restaurants, truck stops and fraternal and veterans’ organizations.

Under the terms of the Video Gaming Act all video gaming terminals must be sold through authorized equipment distributors.

Operators are expected to begin installing 40,000 or more VLT’s in late 2010 or early 2011.

The Funding Stop president Edgar Colomb added to the announcement by saying, “We’re thrilled to have created a strategic alliance with partners like Betson and WMS. We anticipate Betson to be licensed quickly in Illinois while WMS is already a well-respected name in the gaming industry. This agreement expands The Funding Stop’s ability to bring value to customers in Illinois.”

The company has noted that gaming operations continue to achieve solid performance and anticipate a rise in year-over-year revenue per day per participation machine and the average installed base in the December 2009 quarter.

Revenue growth for fiscal 2010 is expected to reflect new market opportunities, further anticipated worldwide market share gains and the high level of customer interest for products unveiled at the G2E industry trade show last month.

WMS also reinforces its expectations for ongoing operating margin enhancements due to the firm customer demand for the Bluebird ®2 gaming machines with higher realized average selling prices and further improvement in operating execution.

The game developer is also proactively addressing the next stage of casino gaming floor evolution through its WAGE-NET networked gaming solution, a suite of four platform technologies and system applications designed to increase revenue capabilities and operational efficiency of casinos.

The slot game developer and former pinball machine manufacturer hopes to appeal to younger players through the technology and techniques of video games, 70 inch video screens, 3D graphics, sound effects, interactive games and group competition.

Last month the gaming provider unveiled its new Lord of the Rings video slot game at the G2E convention in Las Vegas, expecting to do just that.

The interactive game allows players to enter a user name and password to store their scores and access their saved games for future play, even at another casino.

Players follow a map through Middle-Earth and take players on an epic journey through the motion picture trilogies storyline. Along the way they unlock new elements of the legendary adventure scoring points and bonus rounds. Lighting bolts flash and strike the earth’s image on the screen while speakers under the seat provide a thundering rumble.

While the game provides the ambiance of a video arcade game the slot machine can payout thousands of dollars.

Industry experts anticipate the video slot machine continuing the company’s success into “interactive gaming”.

According to Chairman Gamache the companies goal is to “create technology advancements … that deliver next generation gaming products with high player-appealing entertainment,” in hopes of developing a younger demographic.

VP of Networked Gaming Engineering and Operations, Mark Pace, accepted the award on behalf of the company at a reception yesterday at the Global Gaming Expo.

WMS is the first recipient of the award intended to recognize the gaming industry product that best exemplifies the highest standard of system and product interoperability on the casino floor.

The Gaming & Leisure Community’s Advisory Board, comprised of industry leaders, judged products and awarded the honors to WMS’s WAGE-NET® networked gaming system.

The gaming solution is a suite of platform technologies and system applications based on open architecture designed to be fully interoperable with other similarly developed systems. The product was designed using industry standard communication protocols developed by the Gaming Standards Association.

Brian R. Gamache, Chairman and CEO, commented, “We are honored to be recognized by industry leaders for our commitment to, and development of, a fully interoperable solution for networked gaming.”

The Illinois based slot machine maker hopes the deal will help fuse the slowly recovering revenue for the company going into the fourth quarter.

The company reported a 26 percent increase in profits for the third quarter, resulting in an unchanging effect on the year’s revenue forecast. Net profit for the companies’ fiscal quarter reached $19.8 million from the $15.7 million reported in the same period last year, although falling short of Wall Streets predictions.

Excluding a charge of 2 cents per share related to convertible notes, WMS stock reported earnings of 36 cents a share matching Wall Streets estimates, as reported by Reuters.

WMS anticipates that the domestic marketplace will continue to be impacted by the low amount of capital budgeted by casino customers for gaming machine purchases in 2009, the continued slow replacement cycle, as well as a lower number of new casino openings compared with the prior-year period.

WMS released a statement saying the lab will be used to debut new technologies and applications, and to demonstrate the effectiveness and efficiency of bringing the entire gambling floor into a networked format.

“Customer interaction is integral to WMS and our product offerings, and our approach in designing the Casino Evolved Advanced Technology Lab was to cultivate a two-way dialog with our customers, regulators and players for addressing the constantly evolving shift in player expectations and the needs of our casino customers,” said WMS President Orrin J. Edidin.

The lab will demonstrate WMS products, including slot machines, account systems, loyalty programs, cashless network and central game management, to prospective customers.

Illinois’ decision to permit video poker at bars and restaurants means orders in the thousands for the supply companies, and new slots at the state race tracks will also increase sales.

Slot machines also seem likely to land at Ohio race tracks soon, and Massachusetts has all but guaranteed it is expanding gambling this fall, with track slots and even a stand-alone casino likely.

JPMorgan noted that the video poker law in Illinois could account for up to 77,000 new games to be installed. North Carolina is also considering reinstating legal video poker just two years after banning it.

While the operators of giant casino resorts see stock value languish, the gaming manufacturers see rosy horizons with the continued wave of new gambling crossing the US.

WMS has managed to increase earnings even while the gaming market overall has shrunk, both by becoming more efficient and by increasing its share of the market. Some analysts have forecast WMS to soon supplant International Game Technology as the industry leader.

But Harry Rady of Asset Management says the stock has already absorbed the effect of WMS overperforming, and a slip backwards in results could send the stock tumbling.

A UNS survey of the casino industry shows a declining expectation of new machine purchases, with only 22 percent of game managers planning on new equipment, as opposed to almost 50 percent last year.

WMS CEO Brian Gamache disputes the doomsayers, asserting that new technology will lead to a large-scale replacement of existing games with new ones, and an increase in legal gaming demand as more states change laws to generate revenue.