Hilton Worldwide Holdings Inc share price up, posts upbeat quarterly results, raises full-year outlook

Hilton Worldwide Holdings, the worlds largest hotel operator, raised its full-year guidance after its first-quarter net profit almost quadrupled thanks to strong business and leisure travel and higher room rates.

Hilton reported that its net income attributable to shareholders soared to $123 million, or 12 cents per share, from $34 million, or 3 cents per share, during the comparable period a year ago. Adjusted earnings were 13 cents per share, exceeding the companys projections of between 8 and 10 cents per share. The better-than-expected results were achieved on the back of rising consumer confidence in the US as the worlds biggest economy remains stable on its recovery track, which allowed hotels to raise room rates.

The company also announced that a closely watched gauge – revenue per available room (RevPAR), which is calculated by multiplying a hotels average daily room rate by its occupancy rate, rose by 6.6% in the first quarter, beatings forecasts for growth in the range of 4.5% and 6.5%. The key metric is expected to mark a 5.5%-6.5% gain in the second quarter and 5.5% to 7% in 2014.

Revenue jumped by 4.4% to $2.36 billion, also exceeding analysts forecasts of $2.35 billion, while costs gained less than 1% to $2.03 billion.

Chief Executive Chris Nassetta said that Hilton had a strong first quarter which exceeded expectations and added that the company is “very optimistic” for the remainder of the year.

The hotel operator said it expects full-year adjusted earnings in the range of 64 and 67 cents per share, building on its February forecast of 57 to 61 cents a share. For the second quarter, Hilton Worldwide Holdings projects adjusted earnings of 18 to 20 cents per share, compared to analysts forecasts for 17 cents per share.

The hotel administrator, which owns the Conrad and Waldorf Astoria brands, has 4 155 hotels with a total of 686 790 rooms, and 510 new hotels are currently under construction. Hilton held its initial public offering last December, raising $2.35 billion in what was the second largest IPO for the year and biggest-ever for a hotel operator.

Hilton Worldwide Holdings Inc closed 0.09% lower in New York on Thursday at $22.64 per share, following a 2.26% jump the day before. Shares surged after Fridays open and traded 3.80% higher at $23.51 per share at 13:37 GMT. The companys stock has gained almost 9% since its listing. According to the Financial Times, the 20 analysts offering 12 month price targets for Hilton Worldwide Holdings Inc have a median target of $25.00, with a high estimate of $27.00 and a low estimate of $22.00. The median estimate represents a 10.42% increase from the previous close of $22.64.