By Sean Froelich
Hilton Worldwide Holdings Inc. will continue expanding rooms after net income rose 21 percent in the first quarter of 2015, topping expectations.
Net income for the quarter ended March 31 rose to $150 million, or 15 cents per diluted share, from $124 million, or 12 cents per diluted share, in last year’s first quarter.
Analysts had expected earnings of 12 cents, according to Bloomberg LP.
“We started the year with another strong quarter, with top line growth at the high end of our guidance, despite significant weather impact in the U.S., and strong fee growth and owned asset performance,” President Christopher J. Nassetta said in a release.
Revenue jumped 10 percent to $2.6 billion from $2.36 billion in the year-ago period.
Hilton entered an agreement to sell Hilton Sydney for A$442 million during the quarter. Proceeds from that deal will be used to reduce long-term debt, the company said. Hilton also recently completed the $1.95 billion sale of Waldorf Astoria New York.
Timeshare sales climbed 19 percent in the quarter to $237 million from $199 million a year ago.
“Hilton’s brands are some of the most recognizable hotel brands in the world,” analysts at Baird Equity Research said in a note Wednesday. Baird pointed to brand loyalty and third-party acquisitions as strengths. “Given these advantages and the ability to charge higher rates for branded products, the Hilton brands are attractive to owners.”
Baird analysts cited catalysts that could boost Hilton shares, including plans to pay dividends to shareholders for the first time later this year and the potential inclusion of the company in the Standard & Poor’s 500 index.
Hilton created 8,000 new hotel rooms and 23,000 new rooms were approved for development. Hilton will also acquire the 224-room Cyprus hotel in Cupertino, California sometime in the second quarter.
Shares of Hilton rose 33 cents, or about 1 percent, to close at $29.76 on Wednesday.