The Flutter Entertainment (LSE:FLTR) share price dropped by over 8% this morning after the company cut its earnings guidance. In an update on recent trading, the Paddy Power owner said a string of punter-friendly results in October resulted in win margins below expected levels. This impacted earnings by approximately £60m.
In addition, its earnings are expected to be hit by the temporary Netherlands exit. Earnings expectations are now £1.24bn-£1.28bn, whereas it previously guided for earnings of £1.27bn-£1.37bn.
It’s not all gloomy in the world of sports betting however. Flutter maintained its leadership position in the US. It captured a 42% share of online sports betting and an 18% share on online gaming. Sales were up too with revenues growing by 85%. The third quarter saw its sportsbook and casino player numbers double on a year-on-year basis. The US is a high-growth region with more states moving towards permitting online sports betting.
Australia was another bright spot in Q3. Sales were up 20%. The company noted that travel restrictions applied to over 60% of the population during the period. This resulted in it capturing additional leisure spending by the locked-down public.
Where next for the Flutter Entertainment share price?
As a group, it achieved 12% year-on-year revenue growth. Investors might potentially view recent trading as a temporary, short-term factor. Longer term, US performance could be viewed as encouraging. By mid-morning, the Flutter Entertainment share price regained some of its earlier losses, but still traded down by 6%.