Hilton Worldwide Holdings Inc. (HLT), the world’s largest publicly traded hotel operator, said fourth-quarter revenue rose 13 percent in the company’s first earnings report after its initial public offering.
Revenue climbed to $2.64 billion from $2.34 billion a year earlier, the McLean, Virginia-based company said today in a statement. Net income attributable to common stockholders fell to $26 million, or 3 cents a share, from $61 million, or 7 cents, in part because of IPO-related costs, Hilton said.
Hilton, which in December raised $2.35 billion in a record IPO for the industry, has benefited from a rising number of leisure and business-group travelers at its U.S. properties, including its namesake properties and DoubleTree and Hampton Inn hotels, according to Patrick Scholes, a SunTrust Robinson Humphrey Inc. analyst in New York.
“With their brand lineup, they mirror quite closely Marriott,” Scholes said before earnings were released, referring to Marriott International Inc., owner of Ritz-Carlton and Renaissance hotels. Unlike Marriott, Hilton is “missing out on not having a bigger footprint at the higher end, where demand is strong.”
Adjusted earnings, which exclude items such as costs tied to the IPO and a gain on debt extinguishment, were 11 cents a share, compared with 10 cents a year earlier. That trailed the average estimate of 19 analysts of about 17 cents a share, according to data compiled by Bloomberg.
Hilton is focused on expanding its portfolio in the upper-upscale, upscale and midscale segments, which include the Hilton brand as well as the DoubleTree, Homewood Suites and Hampton Inn names, Chief Executive Officer Christopher Nassetta said in a Bloomberg Television interview in December. The company is less focused on growing in the luxury market, he said.
Blackstone Group LP (BX) took advantage of a rebound in the hotel market by taking Hilton public six years after acquiring it for $26 billion at the end of the buyout boom. New York-based Blackstone didn’t sell any of its Hilton shares in the IPO and owns about 76 percent of the lodging company.
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