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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported solid third-quarter 2022 results, with earnings and revenues beating the Zacks Consensus Estimate and rising year over year. While the bottom line beat the consensus estimate for the fourth straight quarter, the top line surpassed the same for the sixth consecutive time.
Christopher J. Nassetta, president & CEO of Hilton, stated, "Our diluted EPS, adjusted for special items and Adjusted EBITDA exceeded the high end of our guidance. Improved performance reflected the continued strength in leisure travel, as well as recovering business transient and group demand. We expect these strong trends to continue throughout the fourth quarter with system-wide RevPAR once again exceeding prior peaks."
Q3 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.31, beating the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an adjusted EPS of 78 cents.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $2,368 million surpassed the consensus mark of $2,367 million. Moreover, the top line increased 35.4% from the year-ago quarter’s levels.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) increased 29.9% year over year (on a currency-neutral basis), owing to an increase in occupancy and average daily rate (ADR). Also, RevPAR was up 5% from 2019 levels.
During the quarter, fee revenues increased 33% year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $732 million compared with $519 million reported in the prior-year quarter.
Balance Sheet
As of Sep 30, 2022, cash and cash equivalent balance (including restricted cash) amounted to $1,362 million compared with $1,254 million reported in the previous quarter. The company reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.29%.
During the quarter, the company repurchased 4 million shares of its common stock worth approximately $497 million.
The company declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 30, 2022, to shareholders of record as of Nov 10, 2022.
Business Updates
During third-quarter 2022, Hilton opened 80 new hotels. It also achieved net unit growth of nearly 12,100 rooms. During the quarter, the company unveiled its 600th Hilton Hotels & Resorts property by opening the Curio Collection by the Hilton brand. Additionally, it announced the opening of Waldorf Astoria Kuwait, expanding its luxury portfolio.
As of Sep 30, 2022, Hilton's development pipeline comprised nearly 2,810 hotels, with nearly 416,000 rooms across 112 countries and territories — including 29 countries and territories where it currently has no running hotels. Moreover, 242,600 rooms in the development pipeline were located outside the United States and 204,200 rooms were under construction. For 2022, the company expects net unit growth to be nearly 5%.
Outlook
For fourth-quarter 2022, the company anticipates net income in the range of $295-$316 million. Adjusted EBITDA is expected to be between $641 million and $671 million. The company expects fourth-quarter diluted EPS (adjusted for special items) to be between $1.15 and $1.23.
For the fourth quarter, the company anticipates system-wide RevPAR to increase between 19- 23% on a year-over-year basis. Also, the metric is expected to increase 2-6% from 2019 levels.
For 2022, the company anticipates net income in the range of $1,219-$1,240 million, up from the previous estimate of $1,146-$1,216 million. Adjusted EBITDA is expected to be between $2,500-$2,530 million, up from the previous estimate of $2,400-$2,500 million. General and administrative expenses for 2022 are now expected in the range of $380-$400 million compared with the previous projection of $400 million and $420 million.
The company expects 2022 diluted EPS (adjusted for special items) in the range of $4.46-$4.54, up from the prior estimate of $4.21-$4.46. Full-year capital return is anticipated to be between $1.5 billion and $1.9 billion.
The company anticipates 2022 system-wide RevPAR to increase between 40-43% (compared with the previous projection of 37-43%) on a year-over-year basis. However, the metric is expected to decline 1-3% from 2019 levels.
Crocs sports a Zacks Rank #1 (Strong Buy). CROX has a long-term earnings growth rate of 15%. Shares of Crocs have decreased 48.5% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 49.7% and 20.7%, respectively, from the year-ago period’s levels.
Hyatt sports a Zacks Rank #1. H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has inched up 8% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates a surge of 89.1% and 113%, respectively, from the year-ago period’s reported levels.
Live Nation sports a Zacks Rank #1. LYV has a trailing four-quarter earnings surprise of 70.7%, on average. The stock has declined 19.2% in the past year.
The Zacks Consensus Estimate for LYV’s current financial year sales and EPS indicates growth of 130.8% and 117.2%, respectively, from the year-ago period’s reported levels.
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Hilton (HLT) Q3 Earnings & Revenues Beat Estimates, Rise Y/Y
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported solid third-quarter 2022 results, with earnings and revenues beating the Zacks Consensus Estimate and rising year over year. While the bottom line beat the consensus estimate for the fourth straight quarter, the top line surpassed the same for the sixth consecutive time.
Christopher J. Nassetta, president & CEO of Hilton, stated, "Our diluted EPS, adjusted for special items and Adjusted EBITDA exceeded the high end of our guidance. Improved performance reflected the continued strength in leisure travel, as well as recovering business transient and group demand. We expect these strong trends to continue throughout the fourth quarter with system-wide RevPAR once again exceeding prior peaks."
Q3 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.31, beating the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an adjusted EPS of 78 cents.
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 $2,368 million surpassed the consensus mark of $2,367 million. Moreover, the top line increased 35.4% from the year-ago quarter’s levels.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) increased 29.9% year over year (on a currency-neutral basis), owing to an increase in occupancy and average daily rate (ADR). Also, RevPAR was up 5% from 2019 levels.
During the quarter, fee revenues increased 33% year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $732 million compared with $519 million reported in the prior-year quarter.
Balance Sheet
As of Sep 30, 2022, cash and cash equivalent balance (including restricted cash) amounted to $1,362 million compared with $1,254 million reported in the previous quarter. The company reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.29%.
During the quarter, the company repurchased 4 million shares of its common stock worth approximately $497 million.
The company declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 30, 2022, to shareholders of record as of Nov 10, 2022.
Business Updates
During third-quarter 2022, Hilton opened 80 new hotels. It also achieved net unit growth of nearly 12,100 rooms. During the quarter, the company unveiled its 600th Hilton Hotels & Resorts property by opening the Curio Collection by the Hilton brand. Additionally, it announced the opening of Waldorf Astoria Kuwait, expanding its luxury portfolio.
As of Sep 30, 2022, Hilton's development pipeline comprised nearly 2,810 hotels, with nearly 416,000 rooms across 112 countries and territories — including 29 countries and territories where it currently has no running hotels. Moreover, 242,600 rooms in the development pipeline were located outside the United States and 204,200 rooms were under construction. For 2022, the company expects net unit growth to be nearly 5%.
Outlook
For fourth-quarter 2022, the company anticipates net income in the range of $295-$316 million. Adjusted EBITDA is expected to be between $641 million and $671 million. The company expects fourth-quarter diluted EPS (adjusted for special items) to be between $1.15 and $1.23.
For the fourth quarter, the company anticipates system-wide RevPAR to increase between 19- 23% on a year-over-year basis. Also, the metric is expected to increase 2-6% from 2019 levels.
For 2022, the company anticipates net income in the range of $1,219-$1,240 million, up from the previous estimate of $1,146-$1,216 million. Adjusted EBITDA is expected to be between $2,500-$2,530 million, up from the previous estimate of $2,400-$2,500 million. General and administrative expenses for 2022 are now expected in the range of $380-$400 million compared with the previous projection of $400 million and $420 million.
The company expects 2022 diluted EPS (adjusted for special items) in the range of $4.46-$4.54, up from the prior estimate of $4.21-$4.46. Full-year capital return is anticipated to be between $1.5 billion and $1.9 billion.
The company anticipates 2022 system-wide RevPAR to increase between 40-43% (compared with the previous projection of 37-43%) on a year-over-year basis. However, the metric is expected to decline 1-3% from 2019 levels.
Zacks Rank & Key Picks
Hilton currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Crocs, Inc. (CROX - Free Report) , Hyatt Hotels Corporation (H - Free Report) and Live Nation Entertainment, Inc. (LYV - Free Report) .
Crocs sports a Zacks Rank #1 (Strong Buy). CROX has a long-term earnings growth rate of 15%. Shares of Crocs have decreased 48.5% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 49.7% and 20.7%, respectively, from the year-ago period’s levels.
Hyatt sports a Zacks Rank #1. H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has inched up 8% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates a surge of 89.1% and 113%, respectively, from the year-ago period’s reported levels.
Live Nation sports a Zacks Rank #1. LYV has a trailing four-quarter earnings surprise of 70.7%, on average. The stock has declined 19.2% in the past year.
The Zacks Consensus Estimate for LYV’s current financial year sales and EPS indicates growth of 130.8% and 117.2%, respectively, from the year-ago period’s reported levels.