NEW YORK More and more first quarter earnings reports are rolling in, and so far the consensus has been that most hotel companies fared well during the quarter ended March 31, however, the outlook for the rest of year may not be as positive.
Marriott International was the first out of the gate with its earning s report, noting that the company beat estimates by 29% in the first quarter. However, the company was also quick to warn that its total 2001 earnings might fall below Wall Street s estimate of $2.12 per share.
Extended Stay America also beat Wall Street estimates, with earnings rising more than 50%, however, it said that growth would most likely slow due to decreasing demand. But despite the slowing economy, the company said it still believes that full-year earnings estimates of $0.82 to $0.87 per share are attainable.
Starwood Hotels & Resorts Worldwide also reported record results for the first quarter of 2001, with total revenues up $18 million to $1.0 billion. In addition, REVPAR from Starwood s owned hotels in North America increased 4.3%, and in its Europe hotels increased 10.9%.
But, once again, due to the continued weakness of the U.S. economy, second quarter REVPAR growth in North America is not expected to achieve the 3% to 4% target. However, third and fourth quarter REVPAR growth looks like it will meet or exceed that target.
Cendant Corp. also beat Wall Street s estimates for the quarter, despite the fact that its earnings still dropped compared to last year. The company reported first-quarter earnings from continuing operations fell to $0.19 per share from $0.22 per share a year earlier. However, Thomson Financial/First Call had expected Cendant to report earnings of $0.16 per share.
Unlike most of its competitors, Cendant raised its second-quarter earnings forecast to $0.27 per share from a previous estimate of $0.26. Yet most analysts still estimate that the company s earnings will range from $0.25 to $0.26, with an average of $0.26, according to First Call.
Hilton Hotels Corp. reported that it did well enough, noting that in the quarter ended March 31, 2001 net income was $55 million, compared to $58 million for the same quarter a year ago. Diluted net income per share was $0.15 compared to $0.16 last year.
Recurring net income per share for Hilton was $0.15 for the first quarter 2001, representing a 25% increase over the $0.12 posted last year. Comparable RevPAR at the companys U.S. owned or operated hotels increased 4.2% during the quarter, with occupancy increasing to 70.6 % and ADR improving 3.9% to $141.41.
Hilton noted that first quarter results were adversely impacted by comparative softness in New York and San Francisco, increased energy costs, and an extensive renovation project at the Hilton New Orleans.
Las Vegas Hotel/Casino operators also turned out to be big winners this quarter, with MGM reporting record corporate earnings and Las Vegas Sands posting high statistics from its Venetian resort.
MGM Mirage, which operates 18 casinos in three continents, reported net income, excluding nonrecurring items, of $85.2 million or $0.53 per share, compared with $48.5 million or $0.42 per share, a year earlier.
Wall Street analysts expected earnings for MGM in the range of $0.39 to $0.47 with a consensus estimate of $0.44, according to Thomson Financial/First Call.
While Las Vegas Sands first quarter results showed EBITDA dropping to $47.5 million from $59.6 million last year, the company s Venetian Resort still achieved record ADR of $220 and 99.6% occupancy rates during the quarter.
Industry tech stocks also reported strong results this quarter. Sabre Holdings Corp. s first quarter financial results showed total revenues of $755 million, up 17% from $645 million last year, primarily due to growth in GetThere and Travelocity.com.
In additi