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Host Hotels (HST) Q2 FFO Beats Estimates, RevPAR Rises Y/Y

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Host Hotels & Resorts, Inc. HST came out with better-than-expected second-quarter results, in terms of adjusted funds from operations (FFO) per share and revenues. The hotel REIT reported second-quarter 2021 adjusted FFO per share of 12 cents, hugely surpassing the Zacks Consensus Estimate of 4 cents. It generated total revenues of $649 million, which surpassed the Zacks Consensus Estimate of $606.4 million.

Adjusted FFO per share also compares favorably with a loss of 26 cents per share reported in the prior-year quarter. The top line improved significantly year over year.

The company’s revenue per available room (RevPAR) witnessed a significant year-over-year rise in the reported quarter.

It acquired the fee-simple interest in the 444-room Four Seasons Resort Orlando at Walt Disney World Resort for $610 million, and the Royal Ka’anapali and Ka’anapali Kai Golf Courses for $28 million.

Behind the Headlines

In the reported quarter, all owned-hotel pro-forma RevPAR (on a constant-dollar basis) increased significantly year over year to $99.86. All owned-hotel pro-forma EBITDA was $126 million.

As of the second-quarter end, room revenues from the transient business were $357 million, indicating a plunge of 33% as compared with revenues in the same period in 2019. Room revenues from group and contract businesses declined 81.9% and 58.5% from second-quarter 2019 to $59 million and $14 million, respectively.

Moreover, room nights for its transient, group and contract businesses declined 30%, 74.5% and 34.3%, respectively, from the same period in 2019. The company’s transient, group and contract businesses accounted for roughly 61%, 35% and 4% of its 2019 room sales, respectively.

Balance Sheet Position

Host Hotels exited the second quarter with liquidity of $1.6 billion, including FF&E escrow reserves of $139 million. As of the same date, the company’s debt balance amounted to $5.5 billion. It has no maturities until 2023.

Capital Expenditure

In the first half of 2021, the company incurred around $180 million of capital expenditure. Of this, $117 million was return on investment capital projects spend, and $63 million was renewal and replacement project expenditure.

Remarkably, for 2021, it expects a capital expenditure of $400-$475 million.

Host Hotels & Resorts, Inc. Price, Consensus and EPS Surprise

Host Hotels & Resorts, Inc. Price, Consensus and EPS Surprise
Host Hotels & Resorts, Inc. Price, Consensus and EPS Surprise

Host Hotels & Resorts, Inc. price-consensus-eps-surprise-chart | Host Hotels & Resorts, Inc. Quote

Host Hotels currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other REITs

We now look forward to the earnings releases of other REITs, including Regency Centers Corporation REG, Lamar Advertising Company LAMR and Iron Mountain Incorporated IRM, which are slated to release results on Aug 5.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report

Iron Mountain Incorporated (IRM) : Free Stock Analysis Report

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