Sunstone Hotel Investors (SHO) Tops Q4 EPS by 4c

Sunstone Hotel Investors (NYSE: SHO) reported Q4 EPS of $0.18, $0.04 better than the analyst estimate of $0.14.

Fourth Quarter 2019 Operational Results (as compared to Fourth Quarter 2018):

• Net Income: Net income decreased 41.6% to $45.4 million. Excluding the effects of the noncash impairment loss, the one hotel sold during the fourth quarter of 2019 and the three hotels sold during the fourth quarter of 2018, net income would have decreased 1.8%.
• RevPAR: 20 Hotel Comparable Portfolio RevPAR increased 0.8% to $190.43.
• Hotel Adjusted EBITDAre Margin: 20 Hotel Comparable Portfolio Adjusted EBITDAre Margin, excluding prior year property tax adjustments, net decreased 110 basis points to 29.4%.
• Adjusted EBITDAre: Adjusted EBITDAre, excluding noncontrolling interest decreased 9.8% to $75.5 million. Excluding the effects of the one hotel sold during the fourth quarter of 2019 and the three hotels sold during the fourth quarter of 2018, Adjusted EBITDAre, excluding noncontrolling interest would have decreased 6.9%.
• Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share decreased 10.3% to $0.26. Excluding the effects of the one hotel sold during the fourth quarter of 2019 and the three hotels sold during the fourth quarter of 2018, the decrease in Adjusted FFO attributable to common stockholders per diluted share would have remained constant at 10.3%.

John Arabia, President and Chief Executive Officer, stated, "During the fourth quarter, our portfolio achieved better-than-expected operating results and superior RevPAR performance relative to the U.S. lodging average. We continue to realize the benefits from the long-term investments we made over the past few years as they have resulted in value appreciation and earnings growth. The better-than-expected fourth quarter performance resulted in RevPAR growth and profitability above the high-end of our guidance range."

Mr. Arabia continued, "We expect the challenging operating environment – the combination of modest revenue growth and elevated expense growth – to persist in 2020, resulting in pressure on hotel profitability. While the operating environment presents short-term challenges, we remain excited about our geographic footprint, which should result in attractive growth relative to our peers. More importantly, our quality portfolio and low-leverage balance sheet provide us with several avenues in which to create long-term stockholder value."

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

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