Flutter Bet on Earnings Falters: Flutter, the colossal force in online betting, anticipates a challenging year-end as recent customer-friendly sports outcomes drive full-year earnings to the lower end of projections. This announcement triggers a notable drop in shares for the world’s largest online betting company.
Flutter reveals ongoing hurdles in the Australian horse racing market, forecasting a persisting weakness into 2024. Q3 revenues there dip by 7% year-on-year on a constant currency basis. Despite reported group revenues showing an 8% increase (13% in constant currency terms), shares of Paddy Power, Betfair, and Fanduel owner experience an 11% decline in early trading, previously boasting a 21% uptick this year.
In August, Flutter had optimistically projected full-year adjusted ex-U.S. core profit to reach between £1.44 billion and £1.6 billion ($1.77 billion to $1.97 billion). However, a winning streak for gamblers in September and October incurs a £50 million cost, exacerbated by adverse foreign exchange movements adding a further £30 million hit.
Flutter made history as the first online betting operator to turn a profit in the United States in the first half of the year. Despite this achievement, the company revises its full-year U.S. earnings estimate to £140 million, down from the initial projection of £90 million to £190 million.
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Analysts, previously expecting total core profit of £1.65 billion, now grapple with Flutter’s guidance of £1.58 billion, prompting disappointment. Rivals like 888 Holdings and Ladbrokes owner Entain have faced their own challenges, with the latter warning on annual and third-quarter online net gaming revenue.
Despite headwinds, Flutter’s gaming revenue significantly outshines sports betting in the quarter. The U.S. market-leading brand, Fanduel, reports a robust 20% growth on a constant currency basis, though a softer 19% increase in the international division and an 11% rise in the UK and Ireland market contribute to the varied performance.
In a strategic move, the Dublin-based group announces plans to delist from Euronext Dublin in early 2024 upon adding a New York listing. This decision follows a trend of major players, including CRH and Smurfit Kappa, departing from the Irish bourse.
In summary, Flutter faces a complex landscape as it navigates through customer-friendly results, market challenges, and strategic shifts, leaving investors and analysts closely watching its moves in the ever-evolving online betting arena.
Our Reader’s Queries
Flutter’s third-quarter results were a letdown, causing a sharp drop in the company’s shares. The underwhelming top line was attributed to a series of customer losses in September and October, as well as currency fluctuations and a sluggish market in Australia. Additionally, tax changes in India also played a role in the disappointing outcome.
Who owns Flutter Entertainment?
The business is now owned by a combination of former Paddy Power and Betfair shareholders, with a 52% to 48% split. The merger was finalized on February 2, 2016. Unfortunately, the company recently announced that 650 jobs will be cut in the United Kingdom and the Republic of Ireland.
Is FanDuel going public?
Flutter Entertainment, the parent company of FanDuel, is all set to launch its American stock listing just days before a major sports betting event in the U.S. This move is a significant step towards expanding its presence in the American market. With a focus on providing top-notch sports betting experiences, Flutter Entertainment is poised to make a big impact in the industry. Stay tuned for more updates on this exciting development.
How much was FanDuel sold for?
Flutter Entertainment recently revealed that it has acquired a 95% stake in FanDuel Group for a whopping $4.1 billion in cash and stock. This move marks a significant increase in Flutter’s ownership of the company, solidifying its position as a major player in the industry. With this acquisition, Flutter is poised to further expand its reach and influence in the world of online gaming and sports betting.