Sunstone Hotel Investors (SHO) Misses Q2 EPS by 12c

Sunstone Hotel Investors (NYSE: SHO) reported Q2 EPS of ($0.55), $0.12 worse than the analyst estimate of ($0.43).

Second Quarter 2020 Operational Results (as compared to Second Quarter 2019):

• Net (Loss) Income: Net loss was $117.5 million as compared to net income of $45.9 million in the second quarter of 2019. Excluding the impairment loss recognized during the second quarter of 2020, net loss would have been $99.4 million.
• 20 Hotel Portfolio RevPAR: 20 Hotel Portfolio RevPAR decreased 98.1% to $3.99.
• 20 Hotel Portfolio Adjusted EBITDAre Margin: 20 Hotel Portfolio Adjusted EBITDAre Margin, excluding prior year property tax adjustments, net decreased 58,280 basis points to (548.5)%.
• Adjusted EBITDAre: Adjusted EBITDAre, excluding noncontrolling interest decreased 147.4% to $(47.0) million.
• Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share decreased 186.1% to $(0.31).

John Arabia, President and Chief Executive Officer, stated, "After suspending operations at 15 of our 19 hotels as a result of the global pandemic, we are pleased to report we are methodically resuming operations at our hotels. In June and July, six properties resumed operations and we plan for more to open in both August and September. The hotels that continued operations, in aggregate, have posted sequential occupancy gains in May, June and July, despite a recent resurgence in national COVID cases, and have reduced their operating losses. The hotels that have recently resumed operations, in aggregate, have quickly met or exceeded our resumption occupancy thresholds and are slowly recovering. As a result of these factors and our ability to aggressively reduce operating expenses during the second quarter, our second quarter losses were lower than we anticipated and our estimate of our monthly cash burn rate has been reduced."

"Despite having to navigate through the most challenging operating environment the economy and our industry has ever faced, we recently completed two transactions that further strengthen our balance sheet and provide additional liquidity and financial flexibility. First, we sold the Renaissance Harborplace, and as a result, further consolidated our portfolio into Long-Term Relevant Real Estate and increased our liquidity by approximately $80 million. Additionally, we finalized amendments to all outstanding unsecured debt, providing a covenant holiday through the first quarter of 2021. We believe our significant liquidity not only provides us with the ability to weather this unprecedented storm, but also positions the Company to take advantage of external growth opportunities that we believe will materialize over the coming quarters."

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

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