Lodging real estate investment trust Host Hotels & Resorts Inc. (HST) on Friday reported a turnaround to profit in the first quarter on strong revenue growth. Adjusted funds from operations or FFO beat analysts' estimates, reflecting higher room rates and continued occupancy growth. Looking ahead, the company raised its financial outlook for fiscal 2013.
As of January 1, 2013, the company adopted calendar quarter reporting periods, while in 2012 it was reporting fiscal quarters, in line with Marriott International.
The Bethesda, Maryland-based company's first-quarter net income was $56 million or $0.08 per share, compared to loss of $2 million or breakeven per share in the year-ago period.
Adjusted FFO for the quarter was $0.28 per share. On average, twenty three analysts polled by Thomson Reuters expected earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude one-time items.
Adjusted results for the quarter were driven by a 5.1 percent growth in comparable hotel RevPAR and strong performances at the company's luxury and resort as well as conference center properties.
Total revenues for the quarter rose 32 percent to $1.26 billion from $952 million in the same period last year. Analysts had a consensus revenue estimate of $1.19 billion.
Comparable hotel revenues increased 3 percent from the year-ago period to $1.17 billion. Comparable hotel revenue per available room or RevPAR, a key performance metric in the hotel industry, increased 5.1 percent to $142.87, primarily driven by 4 percent increase 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 85 basis points.
Adjusted EBITDA was $283 million, up 10 percent from the prior-year period.
Looking ahead to fiscal 2013, Host Hotels now forecasts earnings per share in a range of $0.31 to $0.39, net income between $238 million and $298 million and adjusted FFO per share in a range of about $1.25 to $1.33. Earlier, the company projected earnings per share of about $0.29 to $0.36, net income between $217 million and $276 million, and adjusted FFO per share of about $1.19 to $1.27.
Analysts expect the company to earn $1.26 per share.
The company maintained its outlook for full-year comparable hotel RevPAR to increase 5.0 to 7.0 percent for the year.
HST closed Thursday's trading at $18.41, up $0.18 on a volume of 10.11 million shares.
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