Last week MGM Resorts (NYSE: MGM) reported better-than-expected earnings that had investors dancing in the streets. Revenue increased 3% to $1.5 billion, adjusted property EBITDA of wholly owned operations increased 12% to $301 million, and adjusted loss per share was just $0.16, beating an expected $0.19 loss.

Unlike casino rivals like Las Vegas Sands (NYSE: LVS), which reported a "disappointing" profit on the back of gaming in Asia, MGM is still posting red ink. But investors appear to be shrugging that off, hoping that results will continue to improve in Las Vegas. I saw some good, a little bad, and a few underlying ugly numbers in MGM's earnings report.

The good
Analysts can't stop talking about the impressive 13% jump in revenue per available room (REVPAR), with a 16% spike on the Vegas Strip. This shows that people are coming back to the Strip looking for more than just a big discount. REVPAR increases were solid across the board, so it doesn't look isolated in one market segment.

Macau was also strong in the quarter, with MGM's share of EBITDA jumping to $61.7 million from $23.1 million last quarter. This shouldn't be any surprise considering how strong Macau has been.

The bad
Casino revenue was down 4.7% in the quarter to $582.3 million, as visitors chose to spend on rooms, food and entertainment. MGM doesn't rely on gaming revenue quite as heavily as Melco Crown (Nasdaq: MPEL) or Wynn Resorts (Nasdaq: WYNN) in Macau, but it's still the company's biggest revenue generator -- so this isn't good news.

The ugly
One analyst from CRT Capital upgraded MGM to a buy on "deleveraging" at the company, leaving this Fool to scratch his head. Long-term debt actually increased compared to last quarter, to $12.08 billion, and MGM isn't generating enough cash to pay off its debts.

Interest expense increased to $269.9 million and is barely covered by the company's EBITDA. As a result of this crunch, cash on hand dropped $67.7 million, to $431.3 million, even after a $31 million distribution from MGM Macau. That doesn't look like deleveraging to me.

Foolish bottom line
MGM's improving EBITDA is encouraging, but I still see challenges ahead considering the heavy debt load. As far as investments go, Melco Crown, Las Vegas Sands, and Wynn Resorts are all safer picks with more growth potential.

Interested in reading more about MGM Resorts? Click here to add it to My Watchlist, which will find all of our Foolish analysis on this stock.

Fool contributor Travis Hoium owns shares of Melco Crown and is short MGM Resorts. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Melco Crown Entertainment is a Motley Fool Global Gains pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.