Hyatt Q4 Profit Surges, Beats View; But Revenues Miss

(RTTNews) - Hyatt Hotels Corp. (H) on Wednesday reported a profit for the fourth quarter that rose almost six fold from last year, reflecting a gain on sale of real estate that helped to offset a slight decline in revenues. Adjusted earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates.

For the fourth quarter, net income attributable to the Chicago, Illinois-based hotel chain was $182 million or $1.20 per share, up from $32 million or $0.20 per share in the same period last year. The latest quarter's results include gains on sales of real estate and other of $246 million.

Adjusted for special items, net income attributable to the company for the quarter was $47 million or $0.31 per share, compared to $51 million or $0.32 per share in the year-ago period.

On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter declined 1 percent to $1.08 billion from $1.09 billion last year. Wall Street expected revenues of $1.14 billion.

Direct and selling, general and administrative expenses for the quarter edged up slightly to $1.04 billion.

Owned and leased hotels revenue for the quarter declined 1 percent from the year-ago period to $551 million, while management and franchise fee revenue increased 7 percent to $101 million.

Comparable owned and leased hotel revenue per available room or RevPAR increased 1.9 percent, or 3.4 percent excluding the effect of currency. Occupancy increased 90 basis points and ADR increased 0.7 percent, or 2.2 percent excluding the effect of currency.

Comparable systemwide RevPAR increased 3.1 percent on a reported basis and 5.1 percent at constant currency rates, benefiting from strong average daily rate growth. Comparable U.S. full service hotel RevPAR grew 5.8 percent and comparable U.S. select service hotel RevPAR increased 7.2 percent.

In the quarter, comparable owned and leased hotels operating margins decreased 50 basis points from last year. Owned and leased hotels operating margins also declined 50 basis points.

For fiscal 2014, net income attributable to Hyatt Hotels rose to $344 million or $2.23 per share from $207 million or $1.30 per share last year. Adjusted earnings for the year were $1.09 per share, compared to $1.07 per share in the previous year.

Total revenues for the year grew 6 percent to $4.42 billion from $4.18 billion in the prior year.

Hyatt opened 14 hotels in the fourth quarter and 43 hotels in 2014. The company expects to open about 50 hotels in 2015.

Hyatt expects continued strength in most U.S. markets, while international markets will continue to be challenged due to market-specific factors.

H closed Tuesday's trading at $59.53. In Wednesday's pre-market activity, the stock is up $0.50 or 0.79 percent to $60.00.