Shares of gambling company Eldorado Resorts Inc. (NASDAQ:ERI) jumped as much as 11% in trading on Wednesday, after the company reported second-quarter earnings. Shares were down 10% at the close of trading.
Total pro forma revenue, including Isle of Capri in the results, fell 2.5% to $426.8 million, and net loss was $0.69 per share. But adjusted EBITDA on the same basis rose 7.8% to $100.0 million. If you pull out acquisition charges of $85.5 million, the company would have made a solid profit, which bodes well for the future.
Looking forward, Eldorado Resorts appears to be expanding margin successfully with Isle of Capri under its wing, and that should continue as the integration progresses.
That revenue was down on a combined basis was a bit concerning, but it will take some time to see how the company performs with a bigger asset base. Right now, investors appear focused on the expanded adjusted EBITDA figure, and there may be more synergies recognized in the future. But I would like to see some growth before jumping in to this gambling stock.