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Host Hotels & Resorts Q4 FFO Climbs, Tops Estimates


Lodging real-estate investment trust Host Hotels & Resorts Inc. (HST) reported Thursday a decline in fourth-quarter profit, while adjusted funds from operations or FFO increased from last year and topped analysts' estimates. Looking ahead, the company projects fiscal 2013 FFO in line or below view.

For the fourth quarter, the Bethesda, Maryland-based company's net income available to common stockholders fell to $15 million from last year's $17 million, while earnings per share were flat with last year's $0.02. On a continuing operations basis, earnings dropped from last year.

FFO increased to $293 million from last year's $224 million. FFO per share was $0.40, a growth of 29 percent from last year's $0.31.

Adjusted FFO grew to $298 million from prior year's $233 million, and adjusted FFO per share improved 25 percent to $0.40. On average, 23 analysts polled by Thomson Reuters expected earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total quarterly revenues grew 7 percent to $1.75 billion from the previous year's $1.63 billion, while 17 analysts estimated revenues of $1.72 billion. The growth reflected the improved performance of the owned hotels.

Comparable hotel revenues increased 4 percent year-over-year to $1.45 billion. Comparable hotel revenue per available room or RevPAR, a performance metric in the hotel industry, increased 5.8 percent to $144.09, primarily driven by 2.8 percent improvement in average room rates, coupled with continued occupancy growth.

The company noted that the improvements in revenues led to strong margin growth as comparable hotel adjusted operating profit margins increased 80 basis points.

Adjusted EBITDA was $426 million, 22 percent higher the prior year.

For fiscal 2012, net income was $63 million or $0.08 per share, compared to last year's loss of $16 million or $0.02 per share. NAREIT FFO per share grew 17 percent to $1.04, and Adjusted FFO per share grew 19.6 percent to $1.10. Total revenues increased 7.4 percent to $5.29 billion.

Looking ahead for 2013, Host Hotels expects net income to range between $217 million and $276 million and earnings per share to range between about $0.29 and $0.36. NAREIT and Adjusted FFO per share is projected to be nearly $1.19 to $1.27. Analysts project 2013 earnings of $1.27 per share.

The company said it will recognize a gain of approximately $21 million in the first quarter 2013 related to the sale of Atlanta Marriott Marquis.

Adjusted EBITDA should be approximately $1.25 billion to $1.31 billion for the year.

Further, the company expects that 2013 comparable hotel RevPAR will increase 5 percent to 7 percent and total comparable hotel revenues will increase 3.8 percent to 5.8 percent.

Operating profit margins will increase approximately 270 basis points to 360 basis points and comparable hotel adjusted operating profit margins will increase approximately 50 basis points to 110 basis points.

Host Hotels shares closed Wednesday's trading at $17.03, down $0.25 or 1.45 percent.

by RTTNews Staff Writer

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