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