Host Hotels & Resorts Inc
, a real estate investment trust (REIT), is scheduled to report its
first quarter 2012 earnings on April 25, 2012. The current Zacks
Consensus Estimate for the first quarter is pegged at 13 cents per
share, representing a year-over-year growth of about 17.7%.
Fourth Quarter Recap
Host Hotels reported fourth quarter 2011 FFO (funds from
operations) of $233 million or 31 cents per share, compared with
$187 million or 26 cents per share in the year-earlier quarter. The
fourth quarter 2011 FFO beat the Zacks Consensus Estimate by a
penny. Funds from operations, a widely used metric to gauge the
performance of REITs, is obtained after adding depreciation and
amortization and other non-cash expenses to net income.
The company reported fourth quarter adjusted FFO of $242 million
or 32 cents per share, compared with $201 million or 28 cents per
share in the year-earlier quarter.
Total revenue increased to $1,658 million during the reported
quarter from $1,491 million in the year-ago quarter. Reported
revenue exceeded the Zacks Consensus Estimate by $31 million.
For fiscal 2011, the company reported FFO of $658 million or 89
cents per share versus $465 million or 68 cents in 2010. The fiscal
2011 FFO was also ahead of the Zacks Consensus Estimate by one
For fiscal 2011, the company reported adjusted FFO of $681
million or 92 cents per share, compared with $504 million or 74
cents per share in 2010.
For fiscal 2011, the company reported revenue of $4,998 million
compared with $4,428 million in 2010. The fiscal 2011 revenue beat
the Zacks Consensus Estimate by $73 million.
Agreement of Analysts
In the last 7 days, none of the analysts revised their earnings
estimate for the first quarter while one out 18 analysts raised the
estimate for fiscal 2012 and one decreased the same. This signifies
that the analysts are cautious about both the short- and long-term
earnings prospect of the company.
Magnitude of Estimate Revisions
Taking into account the analysts' earnings revision, the Zacks
Consensus Estimate for the first quarter and fiscal 2012 remained
constant over the last 7 days and 30 days at 13 cents and $1.02,
Host Hotels is the largest lodging REIT with high quality
lodging assets in geographically diverse locations. Over the years,
the company has executed a focused and disciplined long-term
strategic plan to acquire lodging assets in hard-to-replicate
areas, which have the potential for significant capital
appreciation. This provides a significant upside potential for the
The company maximizes the value of its existing portfolio
through aggressive asset management, and works diligently with the
managers of its hotels to reduce operating costs and increase
revenues, and conducts selective capital improvements and
expansions designed to improve operations. In addition, bulk of its
properties is operated under some of the most recognized brand
names in the hospitality industry. This improves the profitability
of the company and strengthens its leading position in the
However, the continuous acquisition spree of Host Hotels
involves significant upfront operating expenses with limited
near-term profitability. New hotels usually take time to generate
revenues, and will continue to drag down margins till they get
Host Hotels currently retains a Zacks #3 Rank, which translates
into a short-term Sell rating. We are also maintaining our
long-term Neutral recommendation on the stock. One of its
La Salle Hotel properties (
) holds a Zacks #2 Rank, which implies a short-term Buy rating.
HOST HOTEL&RSRT (
): Free Stock Analysis Report
LASALLE HTL PRP (
): Free Stock Analysis Report
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