Caesars Entertainment's (NASDAQ:CZR) management tries to put a positive spin on earnings every quarter, but the numbers always fail to back them up. This quarter, CEO Gary Loveman said, "The fourth quarter capped a year that was marked by significant progress on our strategy." Well, let's see what the numbers say.

The numbers
Revenue for the fourth quarter fell 4.3% to $2.02 billion. It declined in each of the company's five regions, highlighted by a 19.2% drop in Atlantic City and a 3.2% drop in Las Vegas. Overall, adjusted EBITDA fell 9.8% to $420.1 million. This is the metric I use to judge gaming companies, so this is a terrible trend for the company going forward.  

On the balance sheet, net debt stayed flat at $18.8 billion. This means the company made just enough to pay its bills in 2012, not even enough to generate cash flow from dozens of casinos. Stockholders' equity fell $1.42 billion, a terrible sign for any company.

The Las Vegas results weren't entirely inconsistent with what we saw from competitors. Las Vegas Sands (NYSE:LVS) saw a 9.2% decline in revenue hurt by a weak hold percentage, Wynn Resorts(NASDAQ:WYNN) revenue increased 12.1% helped by higher hold, and MGM Resorts (NYSE:MGM) saw a slight decline from a year ago overall. The difference comes from exposure to other markets and the balance sheet.

Falling behind rivals
Las Vegas Sands had a far better quarter than its rivals because of its extensive exposure to Macau, particularly the mass market. Wynn and MGM were held up by Macau, but until their Cotai resorts are complete, they'll be in something of a holding pattern.

On the flip side, Caesars is watching Atlantic City deteriorate, assisted by Hurricane Sandy during the fourth quarter. Other regional markets are also slowly falling because of increased competition and a struggling economy.

On the balance sheet side, Caesars is in serious jeopardy of not being able to pay its bills eventually. Massive losses and rising debt can only last so long before debtors refuse to give more money. MGM also holds a lot of debt but isn't in the same trouble, while Wynn and Las Vegas Sands sit on wonderful balance sheets and pay strong dividends.

Caesars' only hope is that online gaming is approved quickly and explodes in popularity. But right now, it looks as if only a few states will make the move, and the feds are far behind. 

There's no reason to buy Caesars right now. In fact, I'm going to make an underperform call on the stock today. I think the market will easily outperform Caesars long-term, and eventually the company's debt will come back to bite it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.