Strong performance at its Las Vegas and Atlantic City properties helped gambling giant Caesars Entertainment Inc. (CZR) swing to a profit and post record fourth quarter earnings, matching Wall Street expectations.

For the three months ending Dec. 31, Harrah's earned $20 million, or 6 cents per share, up from a loss of 84 million, or 28 cents a share, a year ago.

Earnings included $4 million from five properties scheduled to be sold, an $8 million charge for the termination of a lease at Caesars Atlantic City (search) and an $11 million gain from selling real estate in Atlantic City. They also include $16 million of expenses from the company's pending acquisition by Harrah's Entertainment Inc. (HET).

Year-ago earnings included a $57 million write-down of the book value of Flamingo Laughlin (search) and a $38 million goodwill impairment at Caesars Tahoe.

Adjusted income for the fourth quarter was $27 million, or 8 cents per share, versus $11 million, or 4 cents a share, in the year ago quarter.

Analysts surveyed by Thomson First Call had predicted earnings of 8 cents a share.

Previously, the company's highest reported fourth quarter net income was $17 million in 1999, resulting in earnings per share of 5 cents.

In trading Thursday, Caesars shares rose 20 cents to $20.49 on the New York Stock Exchange (search). The stock has traded in a 52-week range of $11.31 to $20.56.

The company reported record fourth-quarter revenues of $1 billion, up from revenues of $946 million in 2003.

Cash flow in the fourth quarter rose to a record $216 million, compared $188 million a year ago. Cash flow is a widely used measure of casino industry profitability.

For the full year, the company earned $297 million, or 94 cents per share, on revenues of $4.21 billion, up from $46 million, or 15 cents per share, on revenues of $3.95 billion in 2003. Cash flow increased to a record $1.22 billion in 2004, up 16 percent from $1.05 billion in 2003.

"The strong performance of our Las Vegas resorts and better-than-expected results in Atlantic City drove record earnings in the fourth quarter," President and Chief Executive Wallace R. Barr said.