What happened 

Shares of gaming supplier International Game Technology PLC (NYSE:IGT) jumped as much as 15.9% in trading Wednesday after reporting third-quarter 2018 results. At 12:05 p.m. EDT, shares were holding at a 13.6% gain on the day.

So what

Revenue was actually down 5% versus a year ago to $1.16 billion, but the company posted net income of $22.3 million, or $0.11 per share, versus an $803.6 million loss a year ago. On an adjusted basis, which pulls out one-time items, earnings were $0.31 per share, down 23% from a year ago.

Slot machine showing all sevens.

Image source: Getty Images.

Despite declining results, the stock is up because earnings were better than expected. Analysts were expecting $0.28 per share in earnings, so there was a solid beat on the bottom line, which overshadowed the overall decline. 

Now what

IGT has been extremely volatile because investors don't know if the company is potentially a high-growth stock or an overleveraged disaster waiting to happen. At the end of the third quarter, the company had $7.57 billion of net debt, and there wasn't much leeway operationally if operations start to deteriorate because of a recession or slowdown in gaming. 

High debt and declining revenue are enough to keep me out of the stock today, and investors should be careful about betting big on such a highly leveraged company that doesn't have growth to go along with it. 

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.