AP News

DiamondRock 3Q results improve, cuts 2012 forecast


BETHESDA, Md. (AP) — DiamondRock Hospitality's fiscal third-quarter results improved as room rates climbed, but the company lowered its 2012 adjusted funds from operations forecast and issued fourth-quarter guidance below Wall Street's view. Its stock fell in afternoon trading.

For the period ended Sept. 7, the lodging real estate investment trust's funds from operations climbed to $34.4 million, or 18 cents per share, from $26.2 million, or 16 cents per shares, during the same period a year earlier.

Analysts expected FFO of 17 cents per share, according to a FactSet survey.

The funds-from-operations metric, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for REITs, because it provides a more accurate picture of cash performance.

DiamondRock Hospitality Co. posted a net loss $44.8 million, or 24 cents per share, in the quarter. This compares with a loss of $1 million, or 1 cent per share, a year ago.

Revenue increased 17 percent to $183.9 million from $156.8 million.

Revenue per available room rose 3.4 percent from a year ago. That metric is a key gauge of a hotel operator's health.

The average daily rate climbed 4.3 percent, while occupancy dipped slightly.

DiamondRock said it now expects full-year adjusted FFO of 74 cents to 76 cents per share. It previously predicted 76 cents to 80 cents per share.

Analysts had been forecasting FFO of 74 cents per share.

For the fourth quarter, the REIT anticipates adjusted FFO of 25 cents to 27 cents per share.

Wall Street was expecting 28 cents per share.

Joshua Attie of Citi Investment Research lowered DiamondRock's rating to "Neutral" from "Buy" and reduced its price target to $10 from $11 citing the disappointing quarterly performance and lackluster fourth-quarter guidance.

The company's stock declined 55 cents, or 5.7 percent, to $9.04 in Friday afternoon trading.

DiamondRock, which is based in Bethesda, Md., owns 26 hotels in North America.


Ebola Rising
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus