Shares of PENN Entertainment (NASDAQ: PENN) surged 5.25% on Tuesday after the casino and sports betting company reported better-than-expected third-quarter earnings, despite a slight revenue miss.

For the quarter ended September 30, 2024, PENN reported an adjusted loss per share of $0.24, beating analysts' consensus estimate of a $0.26 loss. However, revenue of $1.64 billion fell short of the $1.66 billion expected by Wall Street.

The mixed results were driven by several factors. On the positive side, PENN's Interactive segment, which includes online sports betting and iCasino operations, benefited from a higher parlay mix and lower promotional expenses, contributing to better-than-expected hold. Additionally, the company noted that the fourth quarter has started off stronger, led by positive performance in markets like Michigan, Ohio, and St. Louis.

Offsetting these tailwinds, PENN faced challenges in its Northeast segment due to unfavorable hold and volume declines in its South segment related to severe weather disruptions and accelerated hotel renovations.

Despite the headwinds, PENN's CEO Jay Snowden highlighted the company's continued progress in its strategic initiatives, including the launch of account linking between ESPN BET and ESPN, laying the foundation for a personalized sports betting experience across the ESPN ecosystem.