Hilton Worldwide Q3 Profit Declines, Lifts Full-year Earnings Outlook

(RTTNews) - Hilton Worldwide Holdings, Inc. (HLT) Friday reported a decline in the third quarter profit, reflecting higher expenses, despite growth in revenues. The hospitality firm also lifted its adjusted earnings per share outlook for full year 2014.

For the third quarter, net income attributable to stockholders declined to $183 million or $0.19 per share from $200 million or $0.22 per share in the previous year.

On an adjusted basis, earnings for the recent quarter totaled $0.18 per share.

On average, 19 analysts polled by Thomson Reuters expected earnings of $0.17 per share for the quarter. Analysts' estimates typically exclude one-time items.

Adjusted EBITDA increased more than 13 percent to $645 million from $570 million a year earlier.

Total revenues for the quarter grew to $2.64 billion from $2.45 billion in the preceding year. Street were looking for revenues of $2.61 billion.

Revenues from ownership segment increased 8 percent to $1.09 billion. RevPAR at comparable hotels in the segment grew 7.3 percent on a currency neutral basis, and rose 8 percent in actual dollars, led by 9 percent increase in RevPAR at comparable ownership segment hotels in the U.S.

International, or non-U.S. RevPAR improved 5 percent from a year ago. Management and franchise fees were $383 million, up 16 percent from last year.

RevPAR at comparable managed and franchised hotels rose 8.4 percent in actual dollars, and was up 8.6 percent on a currency neutral basis.

Timeshare segment revenue was $295 million, lower than $302 million a year ago.

Total expenses advanced to $2.2 billion from $2.09 billion in the same quarter last year. Income tax expense was $127 million, compared to $70 million last year.

Looking ahead, for the fourth quarter, the company expects adjusted earnings to be in the range of $0.16 to $0.18 per share. Analysts currently expect earnings of $0.18 per share.

Further, for fiscal 2014, the company now expects adjusted earnings per share between $0.69 and $0.71. Earlier, the company projected adjusted earnings per share of $0.67 to $0.70. Analysts now expect fiscal 2014 earnings of $0.69 per share.

For full year 2015, RevPAR is expected to increase between 5.0 percent and 7.0 percent and net unit growth expected to be between 40,000 rooms and 45,000 rooms, a 6.0 percent to 7.0 percent increase in managed and franchised rooms.

Hilton Worldwide opened 70 hotels with over 12,000 rooms in the third quarter of 2014, over 30 percent of which were conversions from non-Hilton brands, and achieved net unit growth of over 11,000 rooms.

HLT closed Thursday's trading at $25.01, up 1.83 percent.