LONDON, UK / ACCESSWIRE / December 18, 2017 / Active-Investors free earnings report on DiamondRock Hospitality Co. (NYSE: DRH) ("DiamondRock") has freshly been issued to its members, and you can also sign up to view this report at www.active-investors.com/registration-sg/?symbol=DRH. The Company reported its third quarter fiscal 2017 operating results on November 06, 2017. The Bethesda, Maryland-based real estate investment trust's funds from operations (FFO) met market expectations, and also updated its guidance for the full fiscal year 2017. Register today and get free access to our complimentary member's area where many more reports are available:
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Earnings Highlights and Summary
DiamondRock's total revenues were $223.49 million for Q3 2017, up 1.5% compared to $220.24 million for Q3 2016. The Company's revenue numbers fell short of analysts' expectations of $224.1 million.
For Q3 2017, DiamondRock's comparable revenue per available room (RevPAR) was $195.13, reflecting a growth of 2.1% compared to $191.06 million in Q3 2016. The Company's comparable hotel adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 31.70% in the reported quarter, reflecting a drop of 115 basis points from 32.855% in the year-ago same period.
DiamondRock reported a net income of $21.62 million, and diluted earnings per share (EPS) of $0.11 for Q3 2017 compared to a net income of $29.94 million, and $0.15 per diluted share in Q3 2016.
The Company's adjusted EBITDA totaled $63.1 million for the reported quarter compared to $65.6 million in Q3 2016. DiamondRock's adjusted FFO was $50.1 million, while adjusted FFO per diluted share was $0.25 for Q3 2017 compared to an adjusted FFO of $52.1 million, or $0.26 per diluted share, in the year-ago same period, and in-line with Wall Street's estimates for FFO of $0.25 per share.
During Q3 2017, DiamondRock's Business Transient segment's revenues increased 8% on a y-o-y basis, driven by a 9.6% increase in demand, and partially offset by a 1.5% decline in average daily rate. The segment's revenues represented 36% of total room revenues, and was the primary driver of its reported quarter outperformance.
The Company's Group segment, which represented 27% of overall room revenues in the reported quarter, outperformed expectations. Despite being negatively impacted by the timing of the Jewish holidays, the Group segment's revenues increased 2.5% on a y-o-y basis in Q3 2017, and significantly outperformed Industry Group's revenue decline of 6%.
As of September 30, 2017, DiamondRock had $166.6 million of unrestricted cash on hand and approximately $940.8 million of total debt, which consisted of property-specific mortgage debt and $300.0 million of unsecured term loans. The Company had no outstanding borrowings on its $300 million senior unsecured credit facility, and 20 of its 28 hotels were unencumbered by debt.
DiamondRock spent approximately $77.5 million on capital improvements during the nine months ended September 30, 2017, primarily related to the third phase of the Chicago Marriott Downtown renovation and guest room renovations at the Gwen, Worthington Renaissance, Charleston Renaissance, and The Lodge at Sonoma. The Company expects to spend between $110 million and $120 million on capital improvements at its hotels in 2017.
For the full fiscal year 2017, DiamondRock raised its comparable RevPAR guidance range to 2% - 2.5%, increasing the bottom-end of the range by 100 basis points and the top-end by 50 basis points. The Company reduced adjusted EBITDA by the $6 million impact from natural disasters and now expects it to be in the band of $239 million - $247 million. Consequently, DiamondRock expects adjusted FFO per share to be in the range of $0.95 - $0.98.
Stock Performance Snapshot
December 15, 2017 - At Friday's closing bell, DiamondRock Hospitality's stock rose 1.24%, ending the trading session at $11.47.
Volume traded for the day: 5.19 million shares, which was above the 3-month average volume of 2.05 million shares.
Stock performance in the last month – up 2.69%; previous three-month period – up 5.52%; and past twelve-month period – up 2.41%
After last Friday's close, DiamondRock Hospitality's market cap was at $2.30 billion.
Price to Earnings (P/E) ratio was at 25.43.
The stock has a dividend yield of 4.36%.
The stock is part of the Financial sector, categorized under the REIT - Hotel/Motel industry. This sector was up 0.7% at the end of the session.
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