Back to top

Image: Bigstock

Hyatt (H) Q3 Earnings & Revenues Miss Estimates, Fall Y/Y

Read MoreHide Full Article

Hyatt Hotels Corporation (H - Free Report) reported dismal third-quarter 2020 results, wherein earnings and revenues not only missed the Zacks Consensus Estimate but also declined sharply on a year-over-year basis. Both the top and bottom lines missed the Zacks Consensus Estimate for the second straight quarter. The company’s results in the quarter were impacted by the coronavirus pandemic.

The company reported adjusted loss per share of $1.48, wider than the Zacks Consensus Estimate of a loss of $1.25. In the prior-year quarter, the company had reported adjusted earnings per share of 37 cents.

Quarterly revenues of $399 million missed the consensus mark of $449 million. The top line also declined 67.2% from the year-ago quarter.

Operating Highlights

Adjusted EBITDA plunged 129.9% to ($48) million. Moreover, adjusted EBITDA margin declined to (35%) in the third quarter against 26.9% growth in the year-ago quarter.

Hyatt Hotels Corporation Price, Consensus and EPS Surprise Hyatt Hotels Corporation Price, Consensus and EPS Surprise

Hyatt Hotels Corporation price-consensus-eps-surprise-chart | Hyatt Hotels Corporation Quote

Segmental Details

Hyatt manages business through four reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; and Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising.

Revenues at Owned and Leased Hotels totaled $80 million, down 81.4% from the year-ago quarter number. The sharp decline can primarily be attributed to the impact of coronavirus on comparable owned and leased hotels, and dispositions. Owned and leased hotels RevPAR declined 83.1% in the quarter. While ADR was down 13.1%, occupancy rate fell 60.5 percentage points during the third quarter.

Meanwhile, adjusted EBITDA decreased 177.4% to ($56) million. At constant currency, the same declined 177.2%.

Revenues at Americas Management and Franchising amounted to $33 million, reflecting a decline of 73.7% and 73.5% from the year-ago figure and constant currency, respectively.

RevPAR for comparable Americas full-service hotels decreased 58.9%. While ADR declined 24.6%, occupancy rates fell 59.4 percentage points from the year-ago quarter number.

Meanwhile, RevPAR for comparable Americas select-service hotels was down 57.8%. While ADR declined 24.8%, occupancy rates decreased 34.6 percentage points from the year-ago quarter number.

Adjusted EBITDA fell 82.9% (as well as in constant currency) to $16 million.

Revenues at ASPAC Management and Franchising slumped 47.9% year over year (down 48.3% at constant currency) to $17 million.

RevPAR for comparable ASPAC full-service hotels declined 58.9%. While ADR declined 26.9%, occupancy rates fell 42.4 percentage points from the year-ago quarter.

Meanwhile, RevPAR for comparable Americas select-service hotels was down 29.3%. Occupancy and ADR declined 9.9 percentage points and 17.3%, respectively, in the quarter under review.

Adjusted EBITDA was down 58.2% (down 58.7% at constant currency) to $9 million.

Revenues at EAME/SW Asia Management and Franchising were down 75.2% to $5 million.

Comparable EAME/SW Asia full-service hotels’ RevPAR decreased 76.1% on account of the COVID-19 crisis. While ADR slumped 10.2%, occupancy rates declined 51.2 percentage points during the quarter.

Adjusted EBITDA plunged 113.4% (down 113.8% at constant currency) to ($2) million.

Balance Sheet

As of Sep 30, 2020, Hyatt reported cash and cash equivalents (including investments in highly-rated money market funds and similar investments) of $1,778 million. The total debt was $2.241 million as of Sep 30, 2020.

The company ended the second quarter with 38,466,898 Class A and 62,696,948 Class B shares issued as well as outstanding. Notably, the company suspended all share repurchase activity effective Mar 3, 2020, and suspended its quarterly dividend through first-quarter 2021.

Other Business Updates

Hyatt continues to witness improvement in RevPAR across all regions. Comparable system-wide RevPAR more than doubled sequentially.

Coming to hotel openings, approximately 92% of total system-wide hotels were open as of Sep 30, 2020, compared with around 80% of total system-wide hotels as of Jun 30, 2020.

Moreover, for October, preliminary estimates indicate a decline of approximately 70% in RevPAR for all comparable system-wide hotels compared with that of 2019. Notably, the decline was primarily due to the negative impact of the coronavirus pandemic.

Hyatt, which shares space with Choice Hotels (CHH - Free Report) , Hilton (HLT - Free Report) and Marriott Vacations Worldwide (VAC - Free Report) , carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
    
See the 5 high-tech stocks now>>

Published in