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Host Hotels' (HST) Q3 FFO Tops Estimates, RevPAR Rises Y/Y

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  • HST

Host Hotels & Resorts, Inc. HST came out with better-than-anticipated third-quarter 2021 results, in terms of adjusted funds from operations (FFO) per share and revenues. The hotel REIT reported adjusted FFO per share of 20 cents, surpassing the Zacks Consensus Estimate of 14 cents.

It generated total revenues of $844 million, handily beating the Zacks Consensus Estimate of $801 million.

The adjusted FFO per share also compares favorably with the loss of 11 cents per share reported in the prior-year quarter. The top line also improved significantly from the prior year’s $198 million.

The company’s revenue per available room (RevPAR) was $129 for the reported quarter, reflecting a 26% increase from the prior quarter.

Host Hotels acquired the Baker's Cay Resort Key Largo, Curio Collection, a 223-room luxury downtown Houston hotel and the Alila Ventana Big Sur for a total investment of $415 million during the July-September period.

Behind the Headlines

In the reported quarter, all owned-hotel pro-forma RevPAR (on a constant-dollar basis) increased significantly year over year to $129. All owned-hotel pro-forma EBITDA was $196 million.

As of the third-quarter end, room revenues from the transient business were $424 million, marking a fall of 19.6% as compared with revenues in the same period in 2019. Room revenues from group and contract businesses declined 54% and 40.5% from third-quarter 2019 to $114 million and $26 million, respectively.

Moreover, room nights for its transient, group and contract businesses declined 23.3%, 47.8% and 9.9%, 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 third quarter with liquidity of $1.2 billion, including FF&E escrow reserves of $138 million. As of the same date, the company’s debt balance amounted to $5.5 billion. It has no maturities until October 2023.

Capital Expenditure

Since the beginning of the year through Sep 30, the company has incurred around $293 million of capital expenditure. Of this, $201 million was return on investment capital projects spend, and $92 million was renewal and replacement project expenditure.

Remarkably, for 2021, it expects a capital expenditure of $410-$465 million.

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.

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

Earnings Release Dates of Other REITs

We now look forward to the earnings releases of other REITs, including Outfront Media Inc. OUT, Welltower Inc. WELL and Federal Realty Investment Trust FRT, scheduled to be out today.

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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