What happened 

Shares of regional gaming company Eldorado Resorts Inc (NASDAQ:ERI) jumped as much as 10.8% in trading Friday after reporting third-quarter earnings that topped expectations. At 3:20 p.m. EDT, shares had given back some of their gains, but were still up 9.1% on the day. 

So what

Total revenues were down 1%, accounting for the Isle of Capri acquisition, to $444.9 million, and net income more than tripled, to $29.6 million, or $0.38 per share. Adjusted for one-time costs, earnings were $0.32 per share, beating estimates by $0.04.

Slot machine showing all 7s.

Image source: Getty Images.

Results were negatively impacted by two hurricanes, without which we would have likely seen growth on the top line. 

Now what

The cost reductions Eldorado projected when buying Isle of Capri are starting to show, as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin increased 300 basis points versus a year ago, to 26.6%. In total, management projected $35 million of annual synergies between the two companies. Given the margin momentum and potential for more growth in a better weather environment, Eldorado is an entertainment company that has a bright future. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.