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Host Hotels & Resorts 2Q FFO improves

BETHESDA — Host Hotels & Resorts Inc. said Friday that a key measure of profitability rose 29 percent in the second quarter as room rates and occupancy improved.

The lodging real estate investment trust also narrowed its full-year forecast.

Host’s funds from operations were $297 million or 39 cents per share. That’s up from $230 million, or 31 cents per share, a year earlier.

Excluding a loss on debt extinguishment and other items, funds from operations were 45 cents per share.

Analysts polled by FactSet expected funds from operations of 42 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.

The average room rate climbed to $204.39 from $191.94. Occupancy was 79.4 percent in the current quarter, up from 77.7 percent in the prior-year period.

Net income increased to $119 million, or 16 cents per share, from $82 million, or 11 cents per share, a year ago.

Revenue for the Bethesda company rose 7 percent to $1.42 billion from $1.33 billion as it made more from hotel rooms and people spending more on food and beverages.

Revenue per available room for hotels open at least a year climbed to $162.69 from $153.39.

Revenue per available room, or revpar, is a key gauge of a hotel operator’s health.

For the year, Host now anticipates adjusted FFO between about $1.28 and $1.32 per share. Its prior guidance was for FFO of about $1.25 to $1.33 per share. Analysts predict FFO of $1.31 per share.

Host Hotels & Resorts currently owns 103 U.S. properties and 15 properties overseas. It also holds non-controlling interests in a joint venture in Europe that owns 19 hotels and a joint venture in Asia that owns one hotel in Australia and a minority stake in two hotels in India.