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Hilton (HLT) Earnings Beat, Revenues Miss Estimates in Q3
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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported mixed third-quarter 2018, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. Notably, revenues missed the consensus mark for the third straight quarter. In the past six months, shares of the company have lost 15.5% compared with the industry’s 23.3% decline.
Hilton’s adjusted earnings of 77 cents per share, surpassed the consensus estimate by a couple of cents and also surged 38% on a year-over-year basis.
Revenues came in at $2,253 million, which missed the consensus mark of $2,410 million. However, the reported figure increased 7.7% from the year-ago quarter number on higher comparable revenue per available room (RevPAR).
During the third quarter, Hilton opened 113 hotels taking the room count to 16,100. The company achieved net unit growth of 14,800 rooms, indicating a 24% increase from the prior-year quarter. As of Sep 30, Hilton’s development pipeline comprised more than 2,420 hotels with 371,000 rooms throughout 108 countries and territories. Additionally, 202,000 rooms in the pipeline were located outside the United States, while 196,000 rooms were under construction.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable RevPAR increased 2% (on a currency-neutral basis) but was below the company’s guided range of 2.5-3%. The uptick was driven by growth average daily rate (ADR). Strength in the company’s international hotels, mainly in Europe and Asia Pacific, also contributed to the upside.
At managed and franchised hotels, comparable RevPAR increased 1.8% in the quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $557 million, up 9% year over year.
Cash, Debt and Share Repurchase
As of Sep 30, 2018, cash and cash equivalents balance summed $700 million. Long-term debt was $7.7 billion. In the third quarter, the company repurchased 1.5 million shares of its common stock for roughly $122 million and an average price per share of $78.81.
In September 2018, Hilton paid a quarterly cash dividend of 15 cents per share on its common stock, for a total of $45 million. In October 2018, the company's board of directors authorized a regular quarterly dividend of 15 cents payable on or before Dec 28 to its shareholders of record as of the close of business on Nov 9.
Fourth-Quarter Outlook
For fourth-quarter 2018, adjusted earnings are anticipated between 66 cents and 71 cents per share. The Zacks Consensus Estimate is pegged at 71 cents. Hilton projects system-wide RevPAR to increase 2-3% year over year on a comparable as well as currency-neutral basis. Adjusted EBITDA is envisioned in the $518-$538 million band. Also, the company expects management and franchise fee revenues to improve in the band of 9-11% year over year.
2018 View Upbeat
For 2018, adjusted earnings per share are projected between $2.67 cents and $2.72 cents, up from $2.64 cents and $2.71, projected earlier. The Zacks Consensus Estimate is pegged at $2.70. System-wide RevPAR is anticipated to witness a year-over-year improvement of 3-3.5% on a comparable and currency-neutral basis compared with 3-4%, anticipated earlier. Meanwhile, adjusted EBITDA is expected in the $2,075-$2,095 million band, up 9-10%.
Additionally, the company continues to expect an increase in management and franchise fee revenues in the band of 9-11% year over year. It continues to anticipate net unit growth of 6.5% as well.
Belmond, Marriott Vacations Worldwide and Peak Resorts earnings in the current year is likely to witness a respective 58.3%, 24.2% and 342.9% growth year over year.
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Hilton (HLT) Earnings Beat, Revenues Miss Estimates in Q3
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported mixed third-quarter 2018, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. Notably, revenues missed the consensus mark for the third straight quarter. In the past six months, shares of the company have lost 15.5% compared with the industry’s 23.3% decline.
Hilton’s adjusted earnings of 77 cents per share, surpassed the consensus estimate by a couple of cents and also surged 38% on a year-over-year basis.
Revenues came in at $2,253 million, which missed the consensus mark of $2,410 million. However, the reported figure increased 7.7% from the year-ago quarter number on higher comparable revenue per available room (RevPAR).
During the third quarter, Hilton opened 113 hotels taking the room count to 16,100. The company achieved net unit growth of 14,800 rooms, indicating a 24% increase from the prior-year quarter. As of Sep 30, Hilton’s development pipeline comprised more than 2,420 hotels with 371,000 rooms throughout 108 countries and territories. Additionally, 202,000 rooms in the pipeline were located outside the United States, while 196,000 rooms were under construction.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable RevPAR increased 2% (on a currency-neutral basis) but was below the company’s guided range of 2.5-3%. The uptick was driven by growth average daily rate (ADR). Strength in the company’s international hotels, mainly in Europe and Asia Pacific, also contributed to the upside.
At managed and franchised hotels, comparable RevPAR increased 1.8% in the quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $557 million, up 9% year over year.
Cash, Debt and Share Repurchase
As of Sep 30, 2018, cash and cash equivalents balance summed $700 million. Long-term debt was $7.7 billion. In the third quarter, the company repurchased 1.5 million shares of its common stock for roughly $122 million and an average price per share of $78.81.
In September 2018, Hilton paid a quarterly cash dividend of 15 cents per share on its common stock, for a total of $45 million. In October 2018, the company's board of directors authorized a regular quarterly dividend of 15 cents payable on or before Dec 28 to its shareholders of record as of the close of business on Nov 9.
Fourth-Quarter Outlook
For fourth-quarter 2018, adjusted earnings are anticipated between 66 cents and 71 cents per share. The Zacks Consensus Estimate is pegged at 71 cents. Hilton projects system-wide RevPAR to increase 2-3% year over year on a comparable as well as currency-neutral basis. Adjusted EBITDA is envisioned in the $518-$538 million band. Also, the company expects management and franchise fee revenues to improve in the band of 9-11% year over year.
2018 View Upbeat
For 2018, adjusted earnings per share are projected between $2.67 cents and $2.72 cents, up from $2.64 cents and $2.71, projected earlier. The Zacks Consensus Estimate is pegged at $2.70. System-wide RevPAR is anticipated to witness a year-over-year improvement of 3-3.5% on a comparable and currency-neutral basis compared with 3-4%, anticipated earlier. Meanwhile, adjusted EBITDA is expected in the $2,075-$2,095 million band, up 9-10%.
Additionally, the company continues to expect an increase in management and franchise fee revenues in the band of 9-11% year over year. It continues to anticipate net unit growth of 6.5% as well.
Zacks Rank & Stocks to Consider
Hilton has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Belmond Ltd. , Marriott Vacations Worldwide Corporation (VAC - Free Report) and Peak Resorts, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Belmond, Marriott Vacations Worldwide and Peak Resorts earnings in the current year is likely to witness a respective 58.3%, 24.2% and 342.9% growth year over year.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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