Host Hotels & Resorts Inc.
a real estate investment trust (REIT),
is scheduled to report second quarter 2012 earnings results
on July 17, 2012. The current Zacks Consensus Estimate for the
quarter is 33 cents , representing a year-over-year growth of
First Quarter Recap
Host Hotels reported first quarter 2012 FFO (funds from
operations) of $101 million or 14 cents per share compared with $77
million or 11 cents per share in the year-earlier quarter. Reported
FFO per share beat the Zacks Consensus Estimate by a penny. Fund
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.
Total revenue increased to $985 million during the reported
quarter from $893 million in the year-ago quarter. The increase in
revenue was driven by a strong performance of the
company-owned hotels including the ten hotels acquired in 2011.
Comparable hotel revenue per available room (RevPAR) jumped 6.1%
in the reported quarter. The increase in RevPAR was primarily
attributable to a 2.9% rise in average room rates and a 2.1% rise
Agreement of Analysts
In the last 7 days, none of the analysts have revised their
earningsestimate for fiscal 2012 and fiscal 2013. This signifies
that the analysts are cautious about both the short- and long-term
earnings prospect of the company.
Magnitude of Estimate Revisions
For full-year 2012, the company expects adjusted FFO in the
range of $1.01 to $1.08 per share. The Zacks Consensus Estimates
for 2012 have remained constant over the last 7 days at $1.06 per
share, which is at the higher end of the company's guidance. For
2013, the Zacks Consensus Estimates have also remained steady over
the last 7 days at $1.25 per share.
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 high quality lodging assets, which have
the potential for significant capital appreciation. This provides
significant upside potential for the company.
Host Hotels 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.
However, the 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 margins till they get established.
Host Hotels currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on the stock. One of its
LaSalle Hotel Properties
also holds a Zacks #3 Rank
HOST HOTEL&RSRT (HST): Free Stock Analysis
LASALLE HTL PRP (LHO): Free Stock Analysis
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