Choice Hotels (NYSE: CHH) reported Q4 EPS of $0.63, in-line with the analyst estimate of $0.63. Revenue for the quarter came in at $237.57 million versus the consensus estimate of $225.87 million.

Consolidated Outlook

• Net income for full-year 2018 is expected to range between $190 million and $196 million, or $3.31 to $3.42 per diluted share.
• Adjusted diluted EPS for full-year 2018 is expected to range between $3.54 and $3.66. The company expects full-year 2018 adjusted net income to range between $204 million and $210 million.
• Adjusted EBITDA for full-year 2018 is expected to range between $320 million and $331 million.
• The effective tax rate is expected to be approximately 23 percent for the first quarter and full-year 2018.
• The company's first quarter 2018 adjusted diluted EPS is expected to range between $0.58 and $0.61.
• Adjusted diluted EPS estimates are based on the current number of shares outstanding, and therefore do not reflect any subsequent changes that may occur due to new equity grants or further repurchases of common stock under the company\'s share repurchase program.
• The adjusted diluted EPS and consolidated adjusted EBITDA estimates assume that the company incurs net reductions in adjusted EBITDA related to non-hotel franchising activities at the midpoint of the range for these investments.

Highlights

• Announced the acquisition of WoodSpring Suites, which added 239 hotels to the company's system in the first quarter of 2018.
• Full-year 2018 net income is projected to range between $190 million and $196 million; Adjusted earnings before income taxes, depreciation and amortization (EBITDA), excluding the application of the new revenue recognition standard and other items, is projected to range between $330 million and $341 million, a 14 percent increase at the midpoint of the range.
• Domestic unit growth, including the acquisition of WoodSpring Suites, for 2018 is expected to range between 7 percent and 8 percent.
• Total revenues for the three months ended December 31, 2017, increased 14 percent from the fourth quarter of the prior year.
• Income before income taxes was $46.7 million for the 2017 fourth quarter, a 7 percent increase from the 2016 fourth quarter.
• The impact of the tax legislation signed into law on December 22, 2017, and other items, resulted in a net loss of $6.4 million, or $0.11 per diluted share for the fourth quarter of 2017. Excluding the impact of these items, adjusted net income would have totaled $35.9 million compared to adjusted net income of $31.8 million for the 2016 fourth quarter, a 13 percent increase. See Exhibit 6 for calculation of adjusted results.
• Fourth quarter adjusted diluted earnings per share (EPS) was $0.63, a 13 percent increase from the 2016 fourth quarter. Full-year 2017 diluted EPS was $2.02 and adjusted diluted EPS was $2.88, a 14 percent increase from 2016.
• Adjusted EBITDA for the fourth quarter and full-year 2017 were $64.5 million and $295.0 million respectively, an increase of 15 percent from the adjusted EBITDA reported for the same periods of 2016.
• Repatriated approximately $200 million of foreign earnings in the first quarter of 2018.

GUIDANCE:

Choice Hotels sees FY2018 EPS of $3.54-$3.66, versus the consensus of $3.49.

For earnings history and earnings-related data on Choice Hotels (CHH) click here.