What happened

Shares of Penn Entertainment (PENN 2.35%) pulled back today after the company reported mixed results in its first-quarter earnings report and as the company was embroiled in controversy after the casino operator fired a popular media personality.

The stock closed down 13.7% on the news.

So what

Penn, which has made a reputation for itself in part as an online gambling company and is the parent of Barstool Sportsbook after it fully acquired Barstool Sports earlier this year, said that revenue in the quarter rose 7% to $1.68 billion, topping expectations at $1.59 billion.

The company noted that strong performance in its Northeast segment was offset by weak results in the South. 

Adjusted earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) fell 3.3% to $478 million, and its interactive or online business continued to lose money, with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $5.7 million.

Operating income in the quarter also fell from $292 million to $199.1 million, while net income benefited from a real estate gain.

Separately, there seemed to be some fallout from the firing of one of Barstool's media personalities after he said a racial slur on air while singing along with a rap song.

On Twitter, some Barstool fans said they would sell their Penn stock, and others trashed the company. Penn defended the move, saying the incident jeopardized its gambling licenses.  

Now what

Penn raised its revenue guidance for the year to account for the Barstool acquisition, calling for revenue of $6.37 billion to $6.81 billion, which compares to the consensus at $6.46 billion, but said it would be neutral to EBITDA.

The impact of the Ben Mintz firing is unclear, but it underscores the risk Penn took on in acquiring Barstool. Dave Portnoy, founder of Barstool and the face of the brand, took to social media to respond to complaints about the termination.

The move seems unlikely to have a lasting impact on Penn, but it does show the company is at a pivotal moment, as it's now the complete owner of Barstool. Meanwhile, the decline in EBITDA also seems to be weighing on the stock.