Hilton (HLT) to Report Q4 Earnings: Here's What to Expect
Hilton Worldwide Holdings Inc. HLT is scheduled to report fourth-quarter 2023 results on Feb 7, before the opening bell.
In the last reported quarter, adjusted earnings were in line with the Zacks Consensus Estimate while revenues surpassed the same by 2.6%. On a year-over-year basis, earnings and revenues increased 27.5% and 12.9%, respectively.
The company reported a trailing four-quarter earnings surprise of 11.3%, on average.
Q4 Estimates
The Zacks Consensus Estimate for adjusted earnings moved north to $1.66 per share from $1.55 per share over the past seven days. The estimated figure indicates a decline of 1.9% from $1.59 per share reported in the year-ago quarter.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote
The consensus estimate for revenues is pegged at $2.57 billion, suggesting growth of 5% from the year-ago quarter’s figure of $2.44 billion.
Factors to Note
Revenues
Hilton’s fourth-quarter results are likely to have benefited from an improvement in system-wide revenue per available room (RevPAR) attributable to increased occupancy rates and average daily rate (ADR), expansion efforts across its brand portfolio and robust loyalty program. It is likely to have witnessed solid RevPAR gains in Asia Pacific, the Middle East and Africa along with the Europe region, owing to strong leisure demand and improvements in business transient and group travel.
For fourth-quarter 2023, management anticipates system-wide RevPAR (at cc) to increase in the 4.5-5.5% band on a year-over-year basis. Our model predicts system-wide ADR and RevPAR to rise 1% and 5.5% year over year, respectively. Further, we expect system-wide occupancy to be 70% compared with the year-ago quarter’s reported value of 67%.
Strong contributions across the company’s franchise and licensing fees and management and franchise fee revenues are likely to have aided Hilton’s top line. For the to-be-reported quarter, we project franchise and licensing fees, as well as, management and franchise fee revenues to jump year over year by 7.7% to $ 578.5 million and 2.9% to $ 709.2 million, respectively. Moreover, we suggest owned and leased hotels revenues to increase 4.7% year over year to $365.3 million.
Earnings
Meanwhile, the bottom line of HLT is likely to have declined year over year due to an increase in the total expense structure of the company. The increase in expenses is backed by unfavorable fluctuations in foreign currency exchange rates, high labor costs along with rent expenses and cost inflation.
For fourth-quarter 2023, the company envisions net income in the range of $374-$388 million. Adjusted EBITDA is expected to be between $739 million and $759 million. Our model predicts net income and adjusted EBITDA to be $379.4 million and $743.8 million for the to-be-reported quarter.
It projects fourth-quarter earnings per share (adjusted for special items) to be between $1.51 and $1.56.
What Our Model Says
Our proven model predicts a likely earnings beat for Hilton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: HLT has an Earnings ESP of +0.85%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HLT has a Zacks Rank of 3, at present.
Other Stocks Poised to Beat on Earnings
Here are some other companies in the Zacks Consumer Discretionary sector, which according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
Hyatt Hotels Corporation H currently has an Earnings ESP of +2.67% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
H’s earnings for the to-be-reported quarter are expected to decrease 85.1%. The company reported better-than-expected earnings in two of the trailing four quarters and missed on other two occasions, the average surprise being 174.9%.
Marriott International, Inc. MAR has an Earnings ESP of +1.72% and a Zacks Rank of 3.
MAR is expected to register an 8.2% increase in earnings for the to-be-reported quarter. The company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 5.6%.
Choice Hotels International, Inc. CHH currently has an Earnings ESP of +1.48% and a Zacks Rank of 3.
CHH’s earnings for the to-be-reported quarter are expected to increase 7.1%. The company reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 5.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Marriott International, Inc. (MAR) : Free Stock Analysis Report
Hyatt Hotels Corporation (H) : Free Stock Analysis Report
Choice Hotels International, Inc. (CHH) : Free Stock Analysis Report
Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report
