Scientific Games Corporation (SGMS) has announced that Ian Timmis will assume the role of Chief Executive Officer (CEO) of its wholly owned subsidiaries ? Global Draw Ltd. and Games Media ? effective March 8, 2010. Mr. Timmis will report to Steve Frater who will continue in his role as Executive Chairman.

Mr. Timmis had previously held the position of Group General Manager, Corporate Development, at Aristocrat Leisure in Australia and played a key role in developing long term strategies including re-engineering Aristocrat’s supply chain, extending its product range and completing a number of significant acquisitions.

Scientific Games said that Mr. Timmis will help drive growth in the Global Draw and Games Media segments. He will also support the development of U.K. gaming firms and drive international growth.

As Chief Executive, Mr. Timmis will initially focus on developing a growth strategy for the Global Draw’s international business. He will also oversee the successful integration of the VideoBet gaming platform into the Global Draw and Games Media following the recently announced international partnership between Scientific Games and Playtech to design and promote new integrated gaming solutions.

Scientific Games continues to grow through international development activities, specifically in France, Italy and Germany. Scientific Games benefits from its strong and growing presence in the worldwide instant ticket and online lottery markets, and has made significant in-roads into international markets that have traditionally been dominated by GTECH Holdings Corporation.

However, Scientific Games recently reported dismal fourth-quarter 2009 results, posting a loss for the quarter versus the analysts’ expectations of a profit. Numbers were primarily hurt by lower instant ticket and service revenue, which caused the shares to slide after the company released its results.

The reported loss was primarily due to a loss on a foreign currency hedge, higher net interest expense and a higher effective tax rate. However, earnings partially benefited from reduced operating loss in the quarter and higher equity earnings from joint ventures.

Earnings, excluding the impact of one-time items, were a loss of 5 cents per share, versus a profit of 18 cents per share reported in the year-ago quarter. This was significantly down from the Zacks Consensus Estimate of earnings of 19 cents per share, posting a negative surprise of 126.32%.

Scientific Games has posted negative surprises in 3 out of the last 4 quarters. The average surprise for the last four quarters (including the fourth quarter of 2009) is a negative 32.27%. Following the company’s dismal results, 2 of the 4 analysts covering the stock lowered their first quarter EPS estimates in the last 30 days as well as in the last 7 days.

The current Zacks Consensus Estimate for the first quarter of 2010 is 13 cents per share, with a downside potential of 15.38%. We expect the company to report earnings below the current Zacks Consensus and remain cautious as the difficult economic environment is taking a toll on the company’s results.

Zacks Investment Research

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