FX.co ★ Hilton Sees Q2 Adj. Earnings Below Market; Lifts FY24 Adj. Earnings Forecast - Update

Hilton Worldwide Holdings, Inc. (HLT) reported an increase in their first-quarter results and provided forecasts for the second quarter. They also revised upwards their adjusted earnings outlook for the fiscal year 2024.

Following this announcement, Hilton shares were trading at $200.50, marking an uptick of around 1.8 percent in pre-market activity on the New York Stock Exchange (NYSE).

For the second quarter, the company anticipates a net income ranging from $443 million to $457 million, equivalent to $1.74 to $1.80 per share. The adjusted earnings are expected to lie between $1.80 and $1.86 per share. However, analysts have on average projected the company's earnings to be $1.88 per share, as recorded by Thomson Reuters. Such estimates usually do not account for special items.

Hilton Worldwide also projects its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to be in the range of $890 million to $910 million. Further, the company anticipates an increase of 2.0 percent to 4.0 percent in its system-wide comparable RevPAR (Revenue Per Available Room), calculated on a currency-neutral basis, from the preceding year.

In terms of the fiscal year 2024 projections, Hilton now expects a net income between $1.586 billion and $1.621 billion, which translates to $6.21 to $6.35 per share. This is a downward revision from the previously forecasted $1.69 billion to $1.73 billion or $6.57 to $6.71 per share. However, the projected adjusted earnings are now at $6.89 to $7.03 per share, which is higher than the previous expectation of $6.80 to $6.94 per share. Analysts predict the company's earnings to stand at $7.12 per share.

The company also envisages its adjusted EBITDA to lie between $3.375 billion and $3.425 billion, a rise from the prior estimate of $3.33 billion to $3.38 billion. The expectation of a growth rate between 2 percent and 4 percent, on a currency-neutral basis, in system-wide comparable RevPAR relative to 2023 stays unchanged.

Reflecting on the first-quarter performance, Hilton‘s profit surpassed the previous year's figure and exceeded Wall Street forecasts. The reported profit was $265 million or $1.04 per share, an improvement from $206 million or $0.77 per share reported in the first quarter of last year.

When excluding certain items, Hilton's adjusted earnings stood at $390 million or $1.53 per share for the period, surpassing analysts' estimation of $1.42 per share. Revenue for the quarter also showed an increase, rising by 12.2 percent to $2.57 billion, up from $2.29 billion recorded last year. The system-wide comparable RevPAR witnessed a 2.0 percent increase on a currency-neutral basis.