Shares of International Game Technology (NYSE: IGT) climbed 18.6% in September, according to data from S&P Global Market Intelligence, rebounding from a five-year low as the gambling-technology company announced a new seven-year contract with the Mississippi Lottery Corporation.
To be clear, IGT stock began to rally along with the broader market at the start of last month, then gained momentum following its Sept. 6 announcement of the long-term deal.
Following a competitive bidding process held by the State of Mississippi, International Game Technology’s subsidiary, IGT Global Solutions, won the contract to provide the Mississippi Lottery with a variety of services including lottery terminals and a draw-based central system. In addition, IGT won a separate seven-year contract to produce instant tickets as well as to provide secure warehousing and game-distribution services. Each of the contracts allows for up to three single-year extensions.
“We are thrilled to have IGT on board with the Mississippi Lottery Corporation,” said lottery president Tom Shaheen. “We look forward to partnering with them in our effort as we pursue our mission of raising funds for roads and bridges throughout Mississippi.”
For perspective, International Game Technology’s stock had plunged more than 20% year to date leading into last month, hurt by the burden of massive debt levels, declining sales, and underwhelming profits. So while this new long-term contract undoubtedly helps appease some investors’ concerns to those ends, after last month’s pop I’m content watching this story play out from the sidelines until IGT is able to demonstrate more tangible progress toward returning to sustained, profitable growth.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.