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Hilton (HLT) Q3 Earnings & Revenues Beat Estimates, Fall Y/Y
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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. However, both the metrics declined sharply year over year. Following the results, the company’s shares gained 1.1% in pre-market trading session.
The company announced that its third-quarter results were materially impacted by the coronavirus pandemic. However, with restrictions lifting and properties reopening, the company is witnessing sequential improvement in occupancy. Christopher J. Nassetta, president & CEO of Hilton, said “While a full recovery will take time, we are well positioned to capture rising demand and execute on growth opportunities.” The company said 97% of Hilton's system-wide properties were open, as of Nov 2, 2020.
Q3 in Detail
In the quarter under review, Hilton’s adjusted earnings per share was 6 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, the company reported adjusted earnings of $1.05 per share.
Quarterly revenues of $933 million beat the consensus mark of $929 million. However, the top line declined 61% from the year-ago quarter. Both the top and bottom lines were negatively impacted by the coronavirus outbreak.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) slumped 59.9% on a currency-neutral basis due to a decline in occupancy, and average daily rate (ADR). The downtrend can be attributed to decrease in travel and tourism.
During the quarter under review, management fee and franchise and licensing fee revenues were down 53%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $224 million compared with $605 million in the prior-year quarter.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
As of Sep 30, 2020, cash and cash equivalent balance (inclusive of restricted cash) amounted to $3,468 million. The company had $10.6 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.86%.
Following the suspension of share repurchase program and dividend payouts in March, no transactions were made during the third quarter (ended Sep 30, 2020). Notably, the company has $2.2 billion under its stock repurchase program.
Business Updates
Notably, Hilton opened 133 new hotels in third-quarter 2020. It also achieved net unit growth of roughly 14,800 rooms.
As of Sep 30, 2020, Hilton's development pipeline comprised more than 2,640 hotels, with roughly 408,000 rooms across 121 countries and territories — including 33 countries and territories where it currently does not have any running hotels. Moreover, 237,000 rooms in the development pipeline were located outside the United States and 217,000 rooms were under construction.
Hilton, which shares space with Marriott (MAR - Free Report) , Choice Hotels International (CHH - Free Report) and Hyatt (H - Free Report) , currently has a Zacks Rank #4 (Sell).
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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Hilton (HLT) Q3 Earnings & Revenues Beat Estimates, Fall Y/Y
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. However, both the metrics declined sharply year over year. Following the results, the company’s shares gained 1.1% in pre-market trading session.
The company announced that its third-quarter results were materially impacted by the coronavirus pandemic. However, with restrictions lifting and properties reopening, the company is witnessing sequential improvement in occupancy. Christopher J. Nassetta, president & CEO of Hilton, said “While a full recovery will take time, we are well positioned to capture rising demand and execute on growth opportunities.” The company said 97% of Hilton's system-wide properties were open, as of Nov 2, 2020.
Q3 in Detail
In the quarter under review, Hilton’s adjusted earnings per share was 6 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, the company reported adjusted earnings of $1.05 per share.
Quarterly revenues of $933 million beat the consensus mark of $929 million. However, the top line declined 61% from the year-ago quarter. Both the top and bottom lines were negatively impacted by the coronavirus outbreak.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) slumped 59.9% on a currency-neutral basis due to a decline in occupancy, and average daily rate (ADR). The downtrend can be attributed to decrease in travel and tourism.
During the quarter under review, management fee and franchise and licensing fee revenues were down 53%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $224 million compared with $605 million in the prior-year quarter.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
Hilton Worldwide Holdings Inc. price-consensus-eps-surprise-chart | Hilton Worldwide Holdings Inc. Quote
Cash, Debt and Share Repurchase
As of Sep 30, 2020, cash and cash equivalent balance (inclusive of restricted cash) amounted to $3,468 million. The company had $10.6 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.86%.
Following the suspension of share repurchase program and dividend payouts in March, no transactions were made during the third quarter (ended Sep 30, 2020). Notably, the company has $2.2 billion under its stock repurchase program.
Business Updates
Notably, Hilton opened 133 new hotels in third-quarter 2020. It also achieved net unit growth of roughly 14,800 rooms.
As of Sep 30, 2020, Hilton's development pipeline comprised more than 2,640 hotels, with roughly 408,000 rooms across 121 countries and territories — including 33 countries and territories where it currently does not have any running hotels. Moreover, 237,000 rooms in the development pipeline were located outside the United States and 217,000 rooms were under construction.
Hilton, which shares space with Marriott (MAR - Free Report) , Choice Hotels International (CHH - Free Report) and Hyatt (H - Free Report) , currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (StrongBuy) stocks here.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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