Park Hotels & Resorts (NYSE: PK) reported Q4 EPS of $0.51, $0.18 better than the analyst estimate of $0.33. Revenue for the quarter came in at $810 million versus the consensus estimate of $782.04 million.

Fourth Quarter 2019 Highlights

• Pro-forma Comparable RevPAR was $178.39, an increase of 0.7% from the same period in 2018;
• Excluding renovation displacement at The Reach Key West, Curio Collection, Pro-forma Comparable RevPAR increased 1.1% from the same period in 2018;
• Pro-forma Comparable Total RevPAR was $275.63, an increase of 2.1% from the same period in 2018;
• Net income was $126 million and net income attributable to stockholders was $123 million;
• Adjusted EBITDA was $223 million;
• Pro-forma Comparable Hotel Adjusted EBITDA margin was 28.3%, a decrease of 40 bps from the same period in 2018;
• Adjusted FFO attributable to stockholders was $173 million;
• Diluted earnings per share was $0.51;
• Diluted Adjusted FFO per share was $0.72; and
• Completed the sales of three non-core hotels for total gross proceeds of $262 million and terminated the ground lease at the Hilton Sheffield.

Thomas J. Baltimore, Jr., Chairman, President and Chief Executive Officer, stated, “I am pleased to announce our fourth quarter and full-year 2019 results, which exceeded our expectations. Comparable RevPAR increased 0.7% in the fourth quarter, bringing our full-year 2019 Pro-forma Comparable RevPAR growth to 1.9% when including the Chesapeake portfolio for the fourth quarter. Our fourth quarter results were driven by continued strength from the Hawaii and San Francisco markets, which have been strong all year, as well as overall group strength that offset business transient softness, which is another trend we’ve seen throughout the year. From a corporate perspective, I am thrilled with our meaningful progress toward integrating the Chesapeake portfolio, and we continue to be excited about the upside we see in these assets. We remain confident in our ability to deliver the previously identified $24 million of EBITDA synergies expected in 2020. Additionally, I am very pleased with our progress toward de-levering the balance sheet, having sold three hotels for gross proceeds of over $260 million during the quarter to reduce our net leverage.”

GUIDANCE:

Park Hotels & Resorts sees FY2020 EPS of $1.12-$1.24, versus the consensus of $1.40.

Full-year 2020 guidance is based in part on the following assumptions:

• The Chesapeake portfolio was held for the full-year 2019 when calculating Comparable RevPAR Growth and Comparable Hotel Adjusted EBITDA margin change;
• Includes $0 of Adjusted EBITDA from the Caribe Hilton (versus the $8 million of Adjusted EBITDA the hotel generated pre-hurricane) as the hotel continues to ramp up full operations and absorb increased insurance premiums from the hurricane;
• RevPAR growth disruption of 50 bps and Adjusted EBITDA disruption of $12 million related to the meeting space ROI projects at the Hilton Orlando Bonnet Creek and Waldorf Astoria Orlando;
• General and administrative expenses are projected to be $43 million, excluding $14 million of non-cash share-based compensation expense;
• Fully diluted weighted average shares are expected to be 240 million; and
• Does not take into account potential future acquisitions and dispositions, including those currently under contract, which could result in a material change to Park’s outlook.

Park’s full-year 2020 guidance is based on many factors, many of which are outside the Company’s control and all of which are subject to change. Park may change the guidance provided during the year as actual and anticipated results vary from these assumptions.

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