Flutter's Q3 Financial Results Exceed Wall Street's Predictions Significantly
In a recent announcement, Flutter Entertainment (NYSE: FLUT) reported its third-quarter earnings, revealing a sturdy financial position and a promising outlook for the future.
The company reported earnings of 43 cents per share on revenue of $3.25 billion, surpassing analysts' expectations of 23 cents on sales of less than $3.20 billion. The reported earnings per share figure, however, is not based on generally accepted accounting principles (GAAP).
Flutter's US division, which has been a major contributor to the company's growth, benefited from a strong start to the 2024 NFL season and a 28% increase in average monthly player growth. Peak wagers per minute in the US for the new NFL season were higher than Super Bowl LVII, indicating a sustained interest in sports betting.
As a result of this strong performance, Flutter anticipates a net impact of $40 million in the second half of 2024 due to the sports betting tax increase implemented in Illinois. Despite this, the company expects FanDuel to achieve fourth-quarter revenue and EBITDA growth of 40% and 206%, respectively.
Flutter also tightened its 2024 guidance for FanDuel, following suit with some rivals. The company's balance sheet, bolstered by growth in the Group's Adjusted EBITDA, is sturdy enough to support the buying of its shares. In September, Flutter announced a $5 billion share repurchase program, and the share repurchase program will commence on November 14, 2024, with Flutter aiming to buy back $350 million by the end of the first quarter. The broader share repurchase plan is expected to last three to four years.
The mid-points of Flutter's EBITDA and revenue forecasts were trimmed by 4% and 1%, respectively. The sports betting tax increase in Illinois moves the state to a graduated levy system, under which large operators like FanDuel and DraftKings pay higher taxes than smaller rivals. Despite this, Flutter expects its US business to post fourth-quarter sales of $6.05 billion to $6.25 billion and EBITDA of $670 million to $750 million.
On November 12, 2024, Flutter Entertainment (NYSE: FLUT) shares rallied in extended trading, reflecting investor confidence in the company's growth prospects. The company experienced a 10% year-over-year growth in customer acquisition, further solidifying its position in the competitive sports betting market.
In a separate development, Private Bancorp of America announced a $5 billion stock buyback plan, which is set to begin and be executed opportunistically through December 31, 2025. This move underscores the confidence of investors in the banking sector as well.
In conclusion, Flutter Entertainment's third-quarter results demonstrate the company's strong performance and growth potential, backed by a sturdy balance sheet and a promising outlook for its US division. The share repurchase program, set to commence in November, is a testament to the company's commitment to returning value to its shareholders.
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