From Bethesda, Md., early Tuesday came the quarterly earnings report for Host Hotels & Resorts (HST), which posted a positive revenue number that met estimates and an earnings-per-share that slightly beat estimates. However, After an early jump, the stock price did not move much from the open, listing up slightly at about $15.40 per share.
The overall revenue number of $1.37 billion was 6.5 percent better than in the same quarter of 2011 but was in-line with estimates. The EPS number was 34 cents per share, which beat estimates by 1 cent and was a nearly 10 percent improvement over the same quarter of 2011. While room rates were up 3.7 percent in the most recent quarter and 3.3 percent for the year, occupancy rates rose 1.7 percent for the quarter (77.6 percent) and 1.9 percent for the year (73.7 percent), which helped increase operating margins by 1. percent in the quarter and 1.1 percent for the year. The company also reported that it had paid back nearly $1 billion in debt during the quarter and has just more than $5 billion remaining in balance.Host issued 3.1 million shares of stock during the quarter, for net proceeds of about $48 million at $15.75 per share.
In its press release, Host also announced that Monday it had finalized the $400 million purchase of the 888-room Grand Hyatt Hotel in Washington, D.C. The company used some cash and some of its revolver draw, and intends to pay back the draw as well as other debts through a five-year term loan current being negotiated at around 2 percent interest. Closing is expected by the end of July.
The overall report may be looked upon rather indifferently by the Street in the early hours, but the numbers may be welcome for hedge funds like Andreas Halvorsen’s Viking Global and Ken Heebner’s Capital Growth Management. These two funds alone were invested in HST stock to the tune of $255 million in combined value as of the end of March, which the stock was selling at about $16 per share.