We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Hyatt Hotels (H) Up 0.6% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Hyatt Hotels (H - Free Report) . Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hyatt Hotels due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hyatt's Q2 Earnings Miss Estimates, Revenues Top
Hyatt reported mixed second-quarter 2021 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. However, the top and the bottom line increased on a year-over-year basis.
Q2 Earnings & Revenues
The company reported adjusted loss per share of $1.15, wider than the Zacks Consensus Estimate of a loss of 89 cents. In the prior-year quarter, the company reported adjusted loss of $1.80 per share. Quarterly revenues of $663 million beat the consensus mark of $662 million by 0.2%. Moreover, the top line surged 165.6% on a year-over-year basis.
Operating Highlights
During the quarter, adjusted EBITDA came in at $55 million against $(117) million reported in the year-ago quarter. Moreover, adjusted EBITDA margin increased to 17.9% in the second quarter against a plunge of 274.6% in the year-ago quarter.
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.
During the second quarter, revenues in the Owned and Leased Hotels segment totaled $191 million compared with $19 million reported in the prior-year quarter. The upside was primarily driven by strong leisure transient demand in various markets in the United States. However, Owned and leased hotels RevPAR are down 53.4% from 2019 levels. During the quarter, average daily rate (ADR) was up 40.2% and occupancy rate improved 39.3 percentage points from 2020 levels. Meanwhile, the segment’s adjusted EBITDA came in at $12 million during second quarter against $(78) million reported in the year-ago quarter. During the quarter, total management and franchise fee revenues came in at $77 million compared with $12 million reported in the year-ago quarter. That said, the metric improved sequentially from $49 million reported in first-quarter 2021.
For Americas Management and Franchising, RevPAR for comparable Americas full-service hotels (during the second quarter) surged 984.3% from the prior-year quarter’s level. While ADR improved 37.4%, occupancy rates increased 36.9 percentage points from the prior-year quarter’s number. Meanwhile, RevPAR for comparable Americas select-service hotels was up 256.2% year over year. ADR increased 21% and occupancy rates improved 42.2 percentage points from the year-ago quarter’s number. Adjusted EBITDA during second quarter came in at $54 million, against $(3) million reported in the year-ago quarter.
For ASPAC Management and Franchising, RevPAR for comparable ASPAC full-service hotels (during the second quarter) surged 139.1% from the year-ago quarter’s figure. ADR increased 19.6% and occupancy rates improved 23.6 percentage points from the year-ago quarter’s number. Meanwhile, RevPAR for comparable ASPAC select-service hotels was up 104.4% on a year-over-year basis. ADR increased 6.1% and occupancy rates improved 26.7 percentage points from the year-ago quarter’s number. Adjusted EBITDA during second quarter came in at $10 million against $(2) million reported in the year-ago quarter.
For EAME/SW Asia Management and Franchising, comparable EAME/SW Asia full-service hotels’ RevPAR surged 431.4% from the year-ago quarter’s level. ADR increased 23% and occupancy rates improved 21.8 percentage points from the year-ago quarter’s number. Adjusted EBITDA during second quarter came in at $(1) million compared with $(11) million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2021, Hyatt reported cash and cash equivalents (including investments in highly-rated money market funds and similar investments) of $1,144 million compared with $1,078 million in the previous quarter. Total debt as of Jun 30, 2021, stood at $3,246 million compared with $3.242 million as of Mar 31, 2021. Meanwhile, the company stated undrawn borrowing availability of $1,500 million under Hyatt's revolving credit facility.
Other Business Updates
Coming to hotel openings, 27 new hotels (or 4,302 rooms) joined Hyatt's system in the second quarter of 2021. This contributed to a 7.1% increase in net rooms from the second quarter of 2020. As of June 30, 2021, the company had executed management or franchise contracts for approximately 495 hotels (or 101,000 rooms) compared with 490 hotels (or 100,000 rooms) as of Mar 31, 2021. Approximately, 98% of total system-wide hotels were open as of Jun 30, 2021 compared with 96% as on Mar 31, 2021.
2021 Outlook
For 2021, the company expects adjusted selling, general and administrative expenses to be approximately $240 million and capital expenditures at approximately $110 million. Meanwhile, unit growth in 2021 is anticipated to be more than 6% on a net-rooms basis.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 21.53% due to these changes.
VGM Scores
At this time, Hyatt Hotels has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hyatt Hotels has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Hyatt Hotels (H) Up 0.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Hyatt Hotels (H - Free Report) . Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hyatt Hotels due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hyatt's Q2 Earnings Miss Estimates, Revenues Top
Hyatt reported mixed second-quarter 2021 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. However, the top and the bottom line increased on a year-over-year basis.
Q2 Earnings & Revenues
The company reported adjusted loss per share of $1.15, wider than the Zacks Consensus Estimate of a loss of 89 cents. In the prior-year quarter, the company reported adjusted loss of $1.80 per share. Quarterly revenues of $663 million beat the consensus mark of $662 million by 0.2%. Moreover, the top line surged 165.6% on a year-over-year basis.
Operating Highlights
During the quarter, adjusted EBITDA came in at $55 million against $(117) million reported in the year-ago quarter. Moreover, adjusted EBITDA margin increased to 17.9% in the second quarter against a plunge of 274.6% in the year-ago quarter.
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.
During the second quarter, revenues in the Owned and Leased Hotels segment totaled $191 million compared with $19 million reported in the prior-year quarter. The upside was primarily driven by strong leisure transient demand in various markets in the United States. However, Owned and leased hotels RevPAR are down 53.4% from 2019 levels. During the quarter, average daily rate (ADR) was up 40.2% and occupancy rate improved 39.3 percentage points from 2020 levels. Meanwhile, the segment’s adjusted EBITDA came in at $12 million during second quarter against $(78) million reported in the year-ago quarter. During the quarter, total management and franchise fee revenues came in at $77 million compared with $12 million reported in the year-ago quarter. That said, the metric improved sequentially from $49 million reported in first-quarter 2021.
For Americas Management and Franchising, RevPAR for comparable Americas full-service hotels (during the second quarter) surged 984.3% from the prior-year quarter’s level. While ADR improved 37.4%, occupancy rates increased 36.9 percentage points from the prior-year quarter’s number. Meanwhile, RevPAR for comparable Americas select-service hotels was up 256.2% year over year. ADR increased 21% and occupancy rates improved 42.2 percentage points from the year-ago quarter’s number. Adjusted EBITDA during second quarter came in at $54 million, against $(3) million reported in the year-ago quarter.
For ASPAC Management and Franchising, RevPAR for comparable ASPAC full-service hotels (during the second quarter) surged 139.1% from the year-ago quarter’s figure. ADR increased 19.6% and occupancy rates improved 23.6 percentage points from the year-ago quarter’s number. Meanwhile, RevPAR for comparable ASPAC select-service hotels was up 104.4% on a year-over-year basis. ADR increased 6.1% and occupancy rates improved 26.7 percentage points from the year-ago quarter’s number. Adjusted EBITDA during second quarter came in at $10 million against $(2) million reported in the year-ago quarter.
For EAME/SW Asia Management and Franchising, comparable EAME/SW Asia full-service hotels’ RevPAR surged 431.4% from the year-ago quarter’s level. ADR increased 23% and occupancy rates improved 21.8 percentage points from the year-ago quarter’s number. Adjusted EBITDA during second quarter came in at $(1) million compared with $(11) million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2021, Hyatt reported cash and cash equivalents (including investments in highly-rated money market funds and similar investments) of $1,144 million compared with $1,078 million in the previous quarter. Total debt as of Jun 30, 2021, stood at $3,246 million compared with $3.242 million as of Mar 31, 2021. Meanwhile, the company stated undrawn borrowing availability of $1,500 million under Hyatt's revolving credit facility.
Other Business Updates
Coming to hotel openings, 27 new hotels (or 4,302 rooms) joined Hyatt's system in the second quarter of 2021. This contributed to a 7.1% increase in net rooms from the second quarter of 2020. As of June 30, 2021, the company had executed management or franchise contracts for approximately 495 hotels (or 101,000 rooms) compared with 490 hotels (or 100,000 rooms) as of Mar 31, 2021. Approximately, 98% of total system-wide hotels were open as of Jun 30, 2021 compared with 96% as on Mar 31, 2021.
2021 Outlook
For 2021, the company expects adjusted selling, general and administrative expenses to be approximately $240 million and capital expenditures at approximately $110 million. Meanwhile, unit growth in 2021 is anticipated to be more than 6% on a net-rooms basis.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 21.53% due to these changes.
VGM Scores
At this time, Hyatt Hotels has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hyatt Hotels has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.