Hyatt's Q3 Earnings Surpass Estimates, Revenues Lag, Stock Down

Zacks Equity Research

Thu, Oct 31, 2024, 7:30 AM 5 min read

Hyatt’s Q3 Earnings & Revenues

Hyatt reported adjusted earnings per share (EPS) of 94 cents, beating the Zacks Consensus Estimate of 90 cents. In the year-ago quarter, the company reported an EPS of 74 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues of $1,629 million lagged the consensus mark of $1,638 million but increased 0.4% on a year-over-year basis.

In the quarter, the company witnessed a 12.8% decline in Owned and Leased revenues to $287 million and an 83.5% decrease in Other revenues to $13 million. Distribution revenues also declined 3.5% to $221 million. However, Net fees increased 4.3% year over year to $241 million. Revenues for reimbursed costs increased to $867 million from $754 million reported in the prior-year quarter.

The company reported a 3% increase in comparable system-wide hotel RevPAR compared with the same period in 2023. However, comparable system-wide all-inclusive resorts’ Net Package RevPAR declined 0.9% year over year.

Hyatt Hotels Corporation Price, Consensus and EPS Surprise

Hyatt Hotels Corporation price-consensus-eps-surprise-chart | Hyatt Hotels Corporation Quote

Hyatt’s Operating Highlights

Adjusted EBITDA was $275 million, up 8.9% year over year. Our model predicted the metric to be $292.6 million.

Adjusted EBITDA of Management and Franchising as well as Distribution increased year over year by 8.9% and 26.1% to $210 million and $38 million, respectively. On the other hand, Owned and Leased, segment’s adjusted EBITDA dwindled 12.5% year over year to $63 million.

Balance Sheet of Hyatt

As of Sept. 30, 2024, Hyatt reported cash and cash equivalents of $1,134 million compared with $1,957 million reported in the previous quarter. Total liquidity was $2.6 billion in the third-quarter end. Total debt as of Sept. 30, 2024, was $3.14 billion.

Other Business Updates of Hyatt

Regarding hotel openings, 16 new hotels (or 2,589 rooms) joined Hyatt's system in the third quarter. As of Sept. 30, 2024, Hyatt had a pipeline of executed management or franchise contracts for approximately 690 hotels (or about 135,000 rooms).

Hyatt’s 2024 Outlook

For 2024, the company continues to expect adjusted general and administrative expenses to be between $425 million and $435 million. Capital expenditures are projected to be $170 million. Net rooms growth is anticipated to be between 7.75% and 8.25% year over year. Net rooms growth excluding the Bahia Principe transaction is anticipated to be in the range of 4% to 4.5%.

Management continues to anticipate 2024 system-wide RevPAR to rise 3-4% from 2023 levels. Adjusted EBITDA is now expected to be in the band of $1.1-$1.12 billion compared with the prior expected range of $1.13-$1.17 billion. The company expects free cash flow to be in the range of $380-$410 million.

H currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The company raised its 2024 adjusted EBITDA guidance due to strong demand and cost-saving opportunities. Management expects net yields, at constant currency, to increase around 10.4% compared with 2023 levels, exceeding the prior guidance provided in June.

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Hilton Worldwide Holdings Inc. HLT reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.

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