HotelNewsNow.com recaps hotel-related financial news each week. Following is the update for: Choice Hotels International, DiamondRock Hospitality, InterContinental Hotels Group, Las Vegas Sands Corporation, Sol Meliá, Wyndham Worldwide Corporation and Wynn Resorts Limited.
The Baird/STR Hotel Stock Index was at 1931.22 as of 10 a.m. this morning. It closed Thursday at 1972.92.
Choice Hotels International (NYSE: CHH) of Silver Spring, Maryland, released positive second quarter results in year-over-year comparisons. Adjusted diluted earnings per share for the second quarter 2010 were US$0.45 compared to US$0.44 for the same period of the prior year. Diluted EPS were US$0.45 for second quarter 2010 compared to US$0.42 for second quarter 2009.
Domestic system-wide revenue per available room increased 0.3% for the second quarter of 2010 compared to the same period of 2009 as occupancy rate increases of 130 basis points were partially offset by a 2.2% decline in average daily rates.
- Read “Choice reports Q2 earnings.”
DiamondRock Hospitality
Bethesda, Maryland-based DiamondRock Hospitality (NYSE: DRH) said second-quarter revenue increased by 5.3% to US$151.2 million from US$143.6 million a year ago. Still, net income declined by 68% to US$839,000, largely because of income tax expense of US$3.1 million.
The company expects RevPAR growth of 2% to 4%.
Intercontinental Hotels Group
The Barclay brothers have sold their 10% stake in InterContinental Hotels Group (NYSE: IHG) for approximately £335 million (US$520 million), according to Bloomberg. Barclays Capital, controlled by David and Frederick Barclay, sold 30 million shares of United Kingdom-based IHG.
In an e-mail to HotelNewsNow.com, Simon French, a leisure research analyst at Panmure Gordon & Company in London, said: “The Barclay brothers selling their stake does remove some long-standing takeover speculation that has surrounded the stock but will likely have brought additional institutional shareholders on to the share register; demand for hotel stocks continues to be strong, particularly those with US exposure given improving occupancies and stabilising room rates.”
IHG’s stock closed Thursday at US$17.41 per share, up 3.6% during the preceding five days.
Las Vegas Sands Corporation
Las Vegas Sands Corporation (NYSE: LVS) said second-quarter net revenue increased by 50.6% to US$1.6 billion. Adjusted net income jumped to US$129.3 million, from US$8.8 million a year ago.
"We are pleased to report that we delivered record revenues and adjusted property EBITDA during the second quarter of 2010,” chairman and CEO Sheldon G. Anderson said in a news release. “Strong revenue growth, increases in operational efficiency and robust operating margins at Marina Bay Sands in Singapore all contributed to substantial margin expansion and a record financial performance overall.”
Sol Meliá
Sol Meliá (MCE: SOL) said it earned a profit of €13.5 million (US$17.6 million) during the first half compared to €1.2 million (US$1.6 million) a year ago. Revenue increased to €581 million (US$756.1 million), a 6.6% increase.
The Spanish company reported RevPAR growth of 11.9% during the second quarter. In issuing guidance, the company said it expects occupancy and RevPAR to continue to climb during the summer months.
Wyndham Worldwide Corporation
Parsippany, New Jersey-based Wyndham Worldwide Corporation (NYSE: WYN) beat previous second-quarter earnings estimates, according to results for the three months ended 30 June 2010.
Second quarter 2010 diluted earnings per share was US$0.51, compared with company-issued guidance of US$0.38 to US$0.42 and US$0.39 in the second quarter of 2009.
In constant currency, second quarter 2010 system-wide RevPAR decreased 1.2%. Including the impact of foreign currency, system-wide RevPAR remained flat in the second quarter of 2010. Second quarter 2010 adjusted EBITDA was US$50 million, consistent with 2009.
- Read “Wyndham reports Q2 earnings.”
The company this week also announced it completed a US$350-million term securitization involving the issuance of investment-grade asset notes. Sierra Timeshare 2010-2 Receivables Funding LLC, an indirect subsidiary of Wyndham, issued US$286 million of A rated and US$64 million of BBB rated vacation ownership loan backed notes with coupons of 3.84% and 5.31% respectively. The advance rate for this transaction was 83.25%.
"This transaction reflects the continuing signs of strength in the asset-backed securities market, evidenced by higher advance rates and the ability to issue subordinated bonds at attractive financing rates," said Tom Conforti, executive VP and CFO, Wyndham Worldwide. "We are pleased with the execution of this transaction, which demonstrates continued investor interest and support of our timeshare business and strong receivables profile."
Wynn Resorts Limited
Las Vegas-based Wynn Resorts Limited (NASDAQ: WYNN) said its net income more than tripled during the second quarter as net revenue grew by 42.9%.
Net income was US$88.9 million, up from US$25.5 million a year ago. Adjusted property EBITDA increased by 46% during the quarter to US$281.4 million.