Sunstone Hotel Investors (SHO) Tops Q2 EPS by 2c, Revenues Beat

Sunstone Hotel Investors (NYSE: SHO) reported Q2 EPS of $0.18, $0.02 better than the analyst estimate of $0.16. Revenue for the quarter came in at $302.9 million versus the consensus estimate of $297.94 million.

• Net income decreased 10.4% to $45.9 million. Excluding the effect of the four hotels sold subsequent to the second quarter of 2018, net income would have decreased 5.2%.
• Income attributable to common stockholders per diluted common share decreased 10.0% to $0.18. Excluding the effect of the four hotels sold subsequent to the second quarter of 2018, income attributable to common stockholders per diluted common share would have decreased 5.3%.
• 21 Hotel Comparable Portfolio RevPAR increased 2.1% to $212.76.
• 21 Hotel Comparable Portfolio Adjusted EBITDAre increased 2.6% to $103.7 million.
• 21 Hotel Comparable Portfolio Adjusted EBITDAre Margin, excluding prior year property tax adjustments, net decreased 30 basis points to 34.3%.
• Adjusted EBITDAre, excluding noncontrolling interest decreased 2.1% to $99.1 million. Excluding the effect of the four hotels sold subsequent to the second quarter of 2018, Adjusted EBITDAre, excluding noncontrolling interest would have increased 4.4%.
• Adjusted FFO attributable to common stockholders per diluted share decreased 2.7% to $0.36. Excluding the effect of the four hotels sold subsequent to the second quarter of 2018, Adjusted FFO attributable to common stockholders per diluted share would have increased 5.9%.

John Arabia, President and Chief Executive Officer, stated, "Second quarter Comparable Portfolio RevPAR increased by 2.1%, driven by strong transient demand, exceeding the high-end of our previously provided guidance range. Comparable property-level Adjusted EBITDA increased 2.6%, benefiting from a 4.9% increase in food and beverage revenue and an 11.9% increase in other operating income. Better-than-expected revenue growth resulted in quarterly earnings materially above the high-end of our previously provided guidance range."

Mr. Arabia added, "Our pristine balance sheet and significant liquidity provide us with substantial flexibility and the ability to create long-term shareholder value through the acquisition of additional Long-Term Relevant Real Estate or the repurchase of our common stock at a discount to net asset value. We remain opportunistic as we expect to continue to recycle capital and redeploy those proceeds into value-creating opportunities."

For earnings history and earnings-related data on Sunstone Hotel Investors (SHO) click here.

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