Hyatt Hotels Corp. (H) Wednesday reported a decline in first-quarter profit, hurt mainly by reduced margins on costs related to renovations at certain hotels. Revenues for the quarter improved on better room rates in the US, even as other regions saw a decline, somewhat impacted by the timing of Easter. Nonetheless, quarterly earnings topped Wall Street estimates by a penny, while revenues missed expectations.
Hyatt shares dropped a near six percent in late noon trade on the New York Stock Exchange, following the news.
Moving forward, Hyatt Hotels indicated expansion in new and attractive markets, with hotels opening in the US, South Korea, China and India.
RevPAR, or revenue per average room - a key measure of a hotel's health -grew 4 percent at full-service owned and leased hotels in the quarter. On a comparable basis, this was up 4.5 percent.
Slight improvement in economic conditions in the US has led to improved occupancy rates. Hyatt reported 2.6 percent increase in RevPAR at full service hotels in the US.
RevPAR for comparable ASPAC hotels slid 2.6 percent. This segment includes Southeast Asia, China, Australia, South Korea and Japan.
RevPAR for comparable EAME/SW Asia hotels increased 4.6 percent. This includes Europe, Africa, Middle East and Southwest Asia.
Chicago, Illinois-based Hyatt reported quarterly net income of $8 million or $0.05 per share, compared to $10 million or $0.06 per share last year.
Excluding items, adjusted earnings for the quarter were $14 million or $0.09 per share, compared to $5 million or $0.03 per share a year ago. On average, 21 analysts polled by Thomson Reuters expected earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter were up by 2 percent at $975 million, compared to $958 million in the prior year. Analysts had consensus revenue estimate of $ 1.01 billion for the quarter.
Expenses increased to $958 million from $951 million a year ago, and asset impairment charges totaled $8 million.
For fiscal year 2013, Hyatt plans capital expenditure of about $275 million. The company expects to open over 35 hotels in the year, and expects margins to pick up on the back of better room rates.
Hyatt stock is trading at $40.20, down $2.48 or 5.81%, on a volume of about 1 million shares.
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