Chesapeake Lodging Trust (CHSP) Misses Q2 EPS by 1c, Revenues Miss; Boosts FY18 EPS Guidance

Chesapeake Lodging Trust (NYSE: CHSP) reported Q2 EPS of $0.40, $0.01 worse than the analyst estimate of $0.41. Revenue for the quarter came in at $163.3 million versus the consensus estimate of $165.28 million.

HIGHLIGHTS

Comparable RevPAR: 4.7% increase for the 21-hotel portfolio over the same period in 2017.
Comparable Adjusted Hotel EBITDAre Margin: 110 basis point increase to 36.3% for the 21-hotel portfolio over the same period in 2017.
Adjusted Hotel EBITDAre: $59.2 million.
Adjusted Corporate EBITDAre: $54.5 million.
Net income available to common shareholders: $23.8 million or $0.40 per diluted common share.
Adjusted FFO: $42.9 million or $0.72 per diluted common share.
Financing: Amended its revolving credit facility by extending its initial term and reducing cost of borrowings.
Disposition: Subsequent to quarter end, sold the 200-room Hyatt Centric Santa Barbara for a sale price of $90.0 million.

“We are pleased with our results for the second quarter, which exceeded the high end of our provided outlook for both RevPAR growth and margin improvement. We saw encouraging levels of demand at our hotels from corporate transient customers, whom our portfolio is most focused on serving, which led to an increase in RevPAR of 4.7% during the quarter. Despite increasing wage and cost pressures, our hotel managers and our asset management team again did an outstanding job managing and controlling expenses during the quarter, leading to a 110 basis point increase in our comparable hotel EBITDAre margin to 36.3%,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer.

Mr. Francis continued, “Subsequent to quarter end, we took advantage of the strong pricing seen in the hotel transaction market by selling the Hyatt Centric Santa Barbara for a sale price of $90.0 million, or approximately $450,000 per key. The $90.0 million sale price represents a 5.0% trailing twelve month NOI cap rate, after factoring in a required 2019 renovation estimated at $6.0 million, and produced a 15.3% unlevered IRR over our ownership period. The sale of the hotel further strengthens our balance sheet and provides investment capacity to reallocate capital in a core market on an opportunistic basis.”

GUIDANCE:

Chesapeake Lodging Trust sees FY2018 EPS of $1.59-$1.67, versus the consensus of $1.14.

For earnings history and earnings-related data on Chesapeake Lodging Trust (CHSP) click here.

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