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Hilton (HLT) Q2 Earnings & Revenues Beat Estimates, Rise Y/Y

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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported solid second-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate as well as increasing on a year-over-year basis. Notably, ramp up of vaccinations and leniency in travel restrictions were tailwinds for the company.

Christopher J. Nassetta, president & CEO of Hilton, stated, “While the pace of recovery varies by region, particularly with the uncertainty surrounding coronavirus variants, we expect continued strength in leisure demand and further upticks in business travel to drive continued resurgence in the back half of the year.“

As of Jul 21, 2021, 99% of Hilton's global hotel properties were open.

Q2 in Detail

In the quarter under review, Hilton reported adjusted earnings per share of 56 cents, surpassing the Zacks Consensus Estimate of 34 cents. In the prior-year quarter, the company reported adjusted loss per share of 61 cents.

Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise

 

Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise

Hilton Worldwide Holdings Inc. price-consensus-eps-surprise-chart | Hilton Worldwide Holdings Inc. Quote

 

Quarterly revenues of $1,329 million beat the consensus mark of $1,308 million. Moreover, the top line surged 135.6% from the year-ago quarter’s levels. The top and the bottom line reflect recovery from the negative effects of the COVID-19 pandemic.

RevPAR and Adjusted EBITDA

In the quarter under review, system-wide comparable revenue per available room (RevPAR) increased 233.8% on a currency-neutral basis owing to increase in occupancy and average daily rate (ADR). The uptrend was driven by the broader distribution of vaccinations and the easing of travel and other restrictions.

During the quarter under review, fee revenues increased 220% year over year. Global recovery from the COVID-19 pandemic coupled with upward trend in travel and tourism benefitted the company.

Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the second quarter was $400 million compared with $51 million in the prior-year quarter.

Cash & Debt

As of Jun 30, 2021, cash and cash equivalent balance (inclusive of restricted cash) amounted to $1,127 million compared with $2,447 million in the previous quarter. The company had $8.9 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 4%. In the previous quarter, the company reported long-term debt of $10.1 billion.

Business Updates

Notably, Hilton opened 119 new hotels in second-quarter 2021. It also achieved net unit growth of nearly 17,800 rooms. During the quarter, the company marked the opening of 200th Tru by Hilton hotel. It also marked the opening of Resorts World Las Vegas in June 2021.

As of Jun 30, 2021, Hilton's development pipeline comprised nearly 2,590 hotels, with nearly 401,000 rooms across 115 countries and territories — including 30 countries and territories where it currently does not have any running hotels. Moreover, 247,000 rooms in the development pipeline were located outside the United States and 203,000 rooms were under construction. For 2021, the company expects net unit growth in the range of 5-5.5%.

Zacks Rank & Key Picks

Hilton currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same space include Choice Hotels International, Inc. (CHH - Free Report) , Marriott Vacations Worldwide Corporation (VAC - Free Report) and Playa Hotels & Resorts N.V. (PLYA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Choice Hotels has three-five-year earnings per share growth rate of 26.5%.

For 2021, earnings for Marriott Vacations and Playa Hotels & Resorts are expected to surge 1,082.2% and 37.7%, respectively.