Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=230220
Story Retrieval Date: 7/29/2014 5:55:21 PM CST
Hyatt Hotels Corp./Aimee Keane/MEDILL
First quarter profit of Hyatt Hotels Corp. surged seven-fold with the sale of 10 hotels. Operating earnings exceeded analysts’ estimates and the stock popped 4 percent.
For the quarter ended March 31, the Chicago-based company reported first quarter earnings of $56 million, or 36 cents a share, compared with $8 million, or 5 cents a share, on more shares, in the same 2013 quarter. Hyatt’s adjusted net earnings increased 42.9 percent to $20 million, or 13 cents per share, from $14 million, or 9 cents per share in the same 2013 quarter.
According to analysts polled by Bloomberg, the earnings per share estimate on a generally accepted accounting basis was 11 cents per share.
Hyatt continued its common stock repurchase plan, buying back 1.17 million shares for $61 million. In April, according to a company release, Hyatt repurchased $27 million worth of shares, and has approximately $101 million remaining under its share repurchase authorization.
Hyatt’s hotel sales, which the company styles as "corporate asset recycling," yielded pre-tax gains of $61 million. The company is currently marketing nine full service North American hotels.
Revenue increased 11.4 percent to $548 million in the first quarter, compared with $492 million in the same quarter last year. Speaking to media and investors Wednesday, president and CEO Mark Hoplamazian said this increase was attributable to strong U.S. performance, food and beverage, and growth of management and franchise fees.
Nikhil Bhalla, an analyst at FBR Capital Markets & Co., based in Arlington, Va., rates Hyatt stock as outperform. He called the increase in the company’s group revenues and the share repurchase positive factors.
“Share repurchases accelerated which we believe the Street will like.” Bhalla stated in a report issued Wednesday.
Hyatt reported annual earnings of $207 million, or $1.29 per share, for 2013, up 135.2 percent from $88 million, or 53 cents per share in 2012.
The stock closed at $56.28, up $2.26.