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Factors Setting the Tone for Eldorado's (ERI) Q1 Earnings

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Eldorado Resorts, Inc. (ERI - Free Report) is scheduled to report first-quarter 2020 results on May 11, after market close. In the last-reported quarter, the company delivered a positive earnings surprise of 8.3%. 

How Are Estimates Placed?

The Zacks Consensus Estimate for first-quarter earnings is pegged at 9 cents. This indicates an 81.6% decline from 49 cents registered in the year-ago quarter. Revenues are expected at $554.3 million, suggesting a decline of 12.8% from the year-earlier reported figure.

Let's take a look at how things have shaped up in the quarter.

Eldorado Resorts Inc Price and EPS Surprise

 

Factors at Play

The coronavirus pandemic is expected to have materially affected Eldorado’s performance in the first quarter. 

Decline in traffic due to temporary shutdown of casino operations in the month of March is likely to get reflected on top-line results. Also, rise in acquisition costs is likely to have weighed on margins. Cash burn due to the closure of properties is likely to have negatively impacted the bottom line. 

Nonetheless, the partnership deal with William Hill, increased exposure to sports betting markets through mobile gaming applications along with a rise in sportsbook venues are likely to have aided the company performance in the first quarter. Moreover, a geographically-diversified regional gaming platform is likely to have boosted the top line.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Eldorado this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. That is not the case here.

Earnings ESP: Eldorado has an Earnings ESP of -405.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Boyd Gaming Corporation (BYD - Free Report) reported preliminary first-quarter 2020 results, wherein both the top and the bottom line missed the Zacks Consensus Estimate. Adjusted loss per share came in at 2 cents. The figure lagged the Zacks Consensus Estimate for earnings of 23 cents. In the prior-year quarter, the company had reported adjusted earnings of 43 cents per share. Quarterly revenues of $680.5 million missed the consensus mark by 12.1% and declined 47.7% year over year.

MGM Resorts International (MGM - Free Report) reported first-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate. The company reported adjusted loss per share of 45 cents, wider than the Zacks Consensus Estimate of a loss of 8 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 14 cents. Quarterly revenues of $2,252.8 million missed the consensus mark by 11.4% and declined 29% year over year as well.

Wynn Resorts, Limited (WYNN - Free Report) reported first-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate for the third straight quarter. The company reported an adjusted loss of $3.54 per share, wider than the Zacks Consensus Estimate of a loss of $1.05. In the prior-year quarter, the company had reported adjusted earnings per share of $1.61. Further, quarterly revenues of $953.7 million lagged the consensus mark by 12.7% and declined 42.3% year over year as well.

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