Hyatt Hotels (H) Tops Q2 EPS by 24c; Raises Outlook

Hyatt Hotels (NYSE: H) reported Q2 EPS of $0.72, $0.24 better than the analyst estimate of $0.48.

The Company is revising the following information for the 2018 fiscal year:

• Net income is expected to be approximately $508 million to $550 million, compared to previous expectation of $495 million to $553 million.
• Adjusted EBITDA is expected to be approximately $775 million to $785 million, compared to previous expectation of approximately $765 million to $785 million. These estimates include a favorable impact from foreign currency of approximately $0 to $5 million, compared to previous expectation of $5 million to $10 million. Refer to the table on page 3 of the schedules for a reconciliation of Net Income Forecast to Adjusted EBITDA Forecast.
• Comparable system-wide RevPAR is expected to increase approximately 3.0% to 4.0% compared to previous expectation of 2.0% to 3.5%.
• The Company expects to return approximately $800 million to shareholders, compared to a previous expectation of at least $700 million, through a combination of share repurchases and cash dividends on its common stock.

The Company is reaffirming the following information for the 2018 fiscal year:

• Adjusted selling, general, and administrative expenses are expected to be approximately $300 million, consistent with previous guidance. This excludes approximately $32 million of stock-based compensation expense, which reflects a $2 million to $3 million decrease from the Company\'s previous expectation, and any potential expenses related to benefit programs funded through rabbi trusts.
• Depreciation and amortization expense is expected to be approximately $320 million to $324 million.
• Interest expense is expected to be approximately $76 million.
• Other income (loss), net is expected to be negatively impacted by approximately $65 million to $75 million related to performance guarantee expense for the four managed hotels in France.
• The effective tax rate is expected to be approximately 27% to 29%.
• The Company expects to grow net rooms by approximately 6.5% to 7.0%. The number of hotel openings remains at approximately 60.
• Capital expenditures are expected to be approximately $375 million.

For earnings history and earnings-related data on Hyatt Hotels (H) click here.

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