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Choice Hotels 2Q profit slips, but still tops view
//July 26, 2013
ROCKVILLE — Choice Hotels International Inc., whose brands include Comfort Inn, Econo Lodge and its namesake, said Friday that its net income fell 11.4 percent in the second quarter, weighed down by increased operating expenses.
The lodging company’s quarterly results topped analysts’ expectations, but its earnings forecasts for third quarter and full year came in below Wall Street’s estimates. Its shares slipped in midday trading.
Choice Hotels earned $28.2 million, or 48 cents per share, for the period ended June 30. That’s down from $31.9 million, or 55 cents per share, a year earlier.
Analysts surveyed by FactSet expected earnings of 46 cents per share.
Operating expenses rose to $133.3 million from $122 million.
Revenue for the Rockville, Md., company rose 6 percent to $183.6 million from $173.6 million in part because it made more money from royalty fees and initial franchise and relicensing fees.
Wall Street expected $181 million in revenue.
Domestic systemwide revenue per available room rose 3.5 percent as occupancy improved and average daily rates increased. Revenue per available room, or revpar, is a key gauge of a lodging company’s health.
Choice Hotels expects third-quarter earnings of 66 cents per share and full-year earnings of $1.84 to $1.87 per share. Analysts predict third-quarter earnings of 69 cents per share and full-year earnings of $1.89 per share.
Choice Hotels franchises more than 6,200 hotels in the U.S. and more than 30 countries and territories.
Its shares fell 55 cents, or 1.3 percent, to $42.10 in midday trading. They are down 8 percent from their 52-week high of $45.96 in late April.
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