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Hilton (HLT) to Report Q3 Earnings: What's in the Cards?
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Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report third-quarter 2022 results on Oct 26, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 22.9%.
How are Estimates Faring?
The Zacks Consensus Estimate for the third-quarter bottom line is pegged at $1.23 per share, indicating an improvement of 57.7% from 78 cents reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2,367 million, suggesting growth of 35.3% from the prior-year quarter’s figure.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
Let's take a look at how things have shaped up in the quarter.
Factors at Play
Hilton’s third-quarter performance is likely to have benefited from a rise in leisure demand and a sequential improvement in RevPAR in corporate transient and group businesses. During the second quarter of 2022, the company’s system-wide comparable revenue per available room (RevPAR) increased 54.3% year over year (on a currency-neutral basis), owing to an increase in occupancy and average daily rate (ADR). The company reported sequential improvements across all segments backed by strong leisure transient trends and improving business activity. HLT also generated solid RevPAR gains in Europe, the Middle East and Africa owing to easing travel restrictions and increased cross-border travel. With continued improvement across all regions, the momentum is likely to have been continued in the to-be-reported quarter. For the third quarter, the company anticipates system-wide RevPAR growth to be between 25% and 30% on a year-over-year basis and 1-5% from 2019 levels.
Strong contributions across the company’s Base and other management fees, Incentive management fees and Owned and leased hotels are likely to get reflected in the third-quarter top line. The Zacks Consensus Estimate for revenues from Base and other management fees is pegged at $84 million, indicating growth of 71.4% from $49 million reported in the prior-year quarter. Incentive management fees are currently projected at $48.7 million, suggesting an improvement of 87.4% from $26 million in the year-ago quarter. Revenues from Owned and leased hotels are pegged at $287 million, suggesting a rise of 44.2% from $199 million reported in the year-ago quarter.
Emphasis on unit expansion, luxury development strategy, hotel conversions, strategic partnerships and loyalty programs are likely to have aided the company’s performance in the third quarter.
However, pandemic-related restrictions in certain areas of China are likey to have impacted demand in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Hilton this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.
Earnings ESP: Hilton has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat.
RCI Hospitality Holdings, Inc. (RICK - Free Report) has an Earnings ESP of +4.15% and a Zacks Rank #1.
Shares of RCI Hospitality have increased 13.2% in the past year. RICK’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 39.4%.
JAKKS Pacific, Inc. (JAKK - Free Report) has an Earnings ESP of +3.25% and a Zacks Rank #3.
Shares of JAKKS Pacific have increased 62.3% in the past year. JAKK’s earnings surpassed the consensus mark in all of the trailing four quarters, the average surprise being 155%.
Cedar Fair, L.P. (FUN - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #3.
Shares of Cedar Fair have declined 15.8% in the past year. FUN’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 5.3%.
Image: Bigstock
Hilton (HLT) to Report Q3 Earnings: What's in the Cards?
Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report third-quarter 2022 results on Oct 26, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 22.9%.
How are Estimates Faring?
The Zacks Consensus Estimate for the third-quarter bottom line is pegged at $1.23 per share, indicating an improvement of 57.7% from 78 cents reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2,367 million, suggesting growth of 35.3% from the prior-year quarter’s figure.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote
Let's take a look at how things have shaped up in the quarter.
Factors at Play
Hilton’s third-quarter performance is likely to have benefited from a rise in leisure demand and a sequential improvement in RevPAR in corporate transient and group businesses. During the second quarter of 2022, the company’s system-wide comparable revenue per available room (RevPAR) increased 54.3% year over year (on a currency-neutral basis), owing to an increase in occupancy and average daily rate (ADR). The company reported sequential improvements across all segments backed by strong leisure transient trends and improving business activity. HLT also generated solid RevPAR gains in Europe, the Middle East and Africa owing to easing travel restrictions and increased cross-border travel. With continued improvement across all regions, the momentum is likely to have been continued in the to-be-reported quarter. For the third quarter, the company anticipates system-wide RevPAR growth to be between 25% and 30% on a year-over-year basis and 1-5% from 2019 levels.
Strong contributions across the company’s Base and other management fees, Incentive management fees and Owned and leased hotels are likely to get reflected in the third-quarter top line. The Zacks Consensus Estimate for revenues from Base and other management fees is pegged at $84 million, indicating growth of 71.4% from $49 million reported in the prior-year quarter. Incentive management fees are currently projected at $48.7 million, suggesting an improvement of 87.4% from $26 million in the year-ago quarter. Revenues from Owned and leased hotels are pegged at $287 million, suggesting a rise of 44.2% from $199 million reported in the year-ago quarter.
Emphasis on unit expansion, luxury development strategy, hotel conversions, strategic partnerships and loyalty programs are likely to have aided the company’s performance in the third quarter.
However, pandemic-related restrictions in certain areas of China are likey to have impacted demand in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Hilton this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.
Earnings ESP: Hilton has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat.
RCI Hospitality Holdings, Inc. (RICK - Free Report) has an Earnings ESP of +4.15% and a Zacks Rank #1.
Shares of RCI Hospitality have increased 13.2% in the past year. RICK’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 39.4%.
JAKKS Pacific, Inc. (JAKK - Free Report) has an Earnings ESP of +3.25% and a Zacks Rank #3.
Shares of JAKKS Pacific have increased 62.3% in the past year. JAKK’s earnings surpassed the consensus mark in all of the trailing four quarters, the average surprise being 155%.
Cedar Fair, L.P. (FUN - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #3.
Shares of Cedar Fair have declined 15.8% in the past year. FUN’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 5.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.