Hilton's Q3 Earnings & Revenues Surpass Estimates, Stock Down

Core Viewpoint - Hilton Worldwide Holdings Inc. reported strong third-quarter 2024 results with earnings and revenues exceeding expectations, but the stock price fell due to lowered guidance for net income and RevPAR for 2024 [1][6]. Financial Performance - Adjusted earnings per share (EPS) for Q3 2024 were $1.92, surpassing the Zacks Consensus Estimate of $1.85, and increased by 15% from $1.67 in the same quarter last year [2]. - Total revenues for the quarter reached $2,867 million, slightly above the consensus estimate of $2,866 million, marking a year-over-year increase of 7.3% [2]. - Franchise and licensing fees rose by 8.6% to $698 million, while base and other management fees also increased by 8.6% to $88 million [2]. - Adjusted EBITDA for Q3 was $904 million, reflecting an 8.4% year-over-year growth, exceeding the estimated $878.5 million [3]. Revenue Metrics - System-wide comparable RevPAR grew by 1.4% year-over-year on a currency-neutral basis, driven by higher occupancy and average daily rates (ADR) [3]. - Owned and leased hotels' revenues decreased by 1.5% year-over-year to $330 million, below the estimated $368.1 million [2]. Balance Sheet and Shareholder Returns - As of September 30, 2024, cash and cash equivalents increased to $1,580 million from $731 million in the previous quarter [4]. - Long-term debt rose to $11.2 billion from $10.2 billion, with a weighted average interest rate of 4.84% [4]. - The company repurchased 3.3 million shares for approximately $764 million and declared a quarterly cash dividend of 15 cents per share [4]. Business Expansion - Hilton opened 531 new hotels in Q3 2024, achieving a net room growth of 33,600 [5]. - The company expanded its portfolio with the addition of SLH properties, increasing its presence in 10 more countries and territories [5]. - The development pipeline includes nearly 3,525 hotels with approximately 492,400 rooms across 120 countries and territories [5]. Future Outlook - For Q4 2024, Hilton expects net income between $371 million and $395 million, with adjusted EBITDA projected between $804 million and $834 million [6]. - The company revised its 2024 net income estimate to a range of $1,405 million to $1,429 million, down from the previous estimate of $1,532 million to $1,555 million [6][7]. - System-wide RevPAR growth for 2024 is now anticipated to be 2-2.5%, reduced from the earlier estimate of 2-3% [7].