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Host Hotels & Resorts 3Q FFO improves, rates climb

BETHESDA — Room rates continued to climb during Host Hotels & Resorts’ third quarter and occupancy improved as the lodging real estate investment trust’s funds from operations climbed 12 percent.

Funds from operations rose to $127 million, or 17 cents per share, for the period ended Sept. 7. That’s up from $113 million, or 16 cents per share, in the same quarter last year.

Excluding debt extinguishment costs and other expenses, funds from operations were 21 cents per share.

Analysts polled by FactSet forecast funds from operations of 20 cents per share.

Funds from operations, or FFO, are considered key to measuring the financial performance of real estate investment trusts. FFO adds items such as amortization and depreciation back to net income.

Average room rates climbed 5 percent, while occupancy rose to 77.5 percent from 75.9 percent.

Host Hotels & Resorts Inc. said Wednesday that it lost $34 million, or 5 cents per share, in the quarter. That compares with a loss of $33 million, or 5 cents per share, a year ago.

Revenue rose 6 percent to $1.2 billion from $1.13 billion. Aside from higher average room rates, the company said it made more money from food and beverages during the quarter.

Revenue per available room, or revpar, for hotels open at least a year increased 7.6 percent.

Revpar is a key gauge of a hotel operator’s performance.

For 2012, Host Hotels & Resorts foresees adjusted FFO of about $1.06 to $1.09 per share.

Analysts forecast FFO of $1.07 per share.

The Bethesda, Md. company expects revenue to increase 7.2 percent to 7.7 percent. Based on 2011’s $5 billion in revenue, this implies about $5.36 billion to $5.38 billion.

Revpar for hotels open at least a year is anticipated to rise 6.25 percent to 7 percent.

Host Hotels shares finished at $15.53 on Tuesday. Its shares hit a 52-week high of $17.57 in mid-September. They traded as low as $10.94 last October.