Hyatt Hotels Second Quarter Results Top Estimates

(RTTNews) - Hyatt Hotels Corp. (H) reported Wednesday a profit for the second quarter that surged from last year, reflecting strong demand for accommodations at its U.S. hotels. Both adjusted earning per share and quarterly revenues topped analysts' expectations.

"Our second quarter of 2013 reflected ongoing positive trends in transient demand at U.S. hotels and strong average daily rate progression. Since the beginning of the year, we have executed on our strategy of expanding in new and attractive markets by opening a total of 24 hotels in the United States, India, France, China and South Korea," President and CEO Mark Hoplamazian said in a statement.

The Chicago, Illinois-based hotel chain reported net income of $112 million or $0.70 per share for the second quarter, sharply higher than $39 million or $0.24 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $70 million or $0.43 per share, compared to $39 million or $0.24 per share in the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter grew 8.3 percent to $1.09 billion from $1.01 billion in the same quarter last year, and topped eighteen Wall Street analysts' consensus estimate of $1.07 billion. Comparable hotel revenue increased 7.0 percent.

Owned and leased hotels revenues grew 8.3 percent to $572 million, and other revenues from managed properties increased 4.4 percent to $403 million from the year-ago quarter.

The results for the latest quarter include a sains on sales of real estate of $99 million.

Revenue per available room or RevPAR, for comparable systemwide hotels was up 3.9 percent in the quarter, as occupancy improved 60 basis points and Average Daily Rate or ADR increased 6.3 percent from last year.

RevPAR for comparable owned and leased hotels was up 7.1 percent, comparable North American full-service RevPAR increased 6.1 percent.

Comparable Americas full-service RevPAR increased 5.5 percent as occupancy improved 70 basis points and ADR increased 4.5 percent from last year. Comparable Americas select-service RevPAR rose 6.0 percent as occupancy improved 150 basis points and ADR increased 4.1 percent from a year ago.

Owned and leased hotel operating margins improved 150 basis points, and comparable owned and leased hotel operating margins increased 230 basis points from last year.

Looking ahead to fiscal 2013, the company has increased its investment spending outlook for the year to over $500 million, inclusive of an expected $325 million investment in the all-inclusive resort segment.

"Looking ahead, we remain focused on improving performance at existing hotels and expanding in new and attractive markets. We expect continued healthy levels of transient demand at U.S. hotels, and anticipate further rate growth," Hoplamazian added.

The company added that over the short-term, it believes that U.S. group demand growth will be modest and that demand in certain markets, such as India and China, will be volatile. It remains confident in the long-term outlook for both transient and group segments.

H closed Tuesday's regular trading session at $42.69, up $0.45 on a volume of 0.36 million shares. In the past 52-week period, the stock has been trading in a range of $33.73 to $43.69.