Hilton Worldwide (HLT) Up 7.1% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Hilton Worldwide Holdings Inc. reported strong third-quarter 2024 earnings and revenues that surpassed estimates, driven by improvements in revenue per available room (RevPAR) due to higher occupancy rates and average daily rates (ADR) [2][3]. Financial Performance - Adjusted earnings per share (EPS) for Q3 2024 were $1.92, exceeding the Zacks Consensus Estimate of $1.85, and reflecting a 15% increase from the previous year's adjusted EPS of $1.67 [3]. - Franchise and licensing fees rose 8.6% year-over-year to $698 million, while base and other management fees also increased by 8.6% to $88 million [3][4]. - Adjusted EBITDA for the quarter was $904 million, an 8.4% year-over-year increase, surpassing the estimated $878.5 million [5]. Revenue Metrics - System-wide comparable RevPAR grew 1.4% year-over-year on a currency-neutral basis, attributed to increased occupancy and ADR [5]. - Owned and leased hotels' revenues decreased by 1.5% year-over-year to $330 million [4]. Balance Sheet and Shareholder Returns - As of September 30, 2024, cash and cash equivalents increased to $1,580 million from $731 million in the prior quarter, while long-term debt rose to $11.2 billion from $10.2 billion [6]. - Hilton repurchased 3.3 million shares worth approximately $764 million and declared a quarterly cash dividend of 15 cents per share [7]. Business Expansion - In Q3 2024, Hilton opened 531 new hotels, achieving a net room growth of 33,600 [8]. - The development pipeline includes nearly 3,525 hotels with almost 492,400 rooms across 120 countries, with expectations for net unit growth of 7-7.5% in 2024 [11]. Future Outlook - For Q4 2024, Hilton anticipates net income between $371-$395 million and adjusted EBITDA between $804 million and $834 million, with expected EPS between $1.57 and $1.67 [12]. - The company revised its 2024 net income estimate to $1,405-$1,429 million, down from a previous estimate of $1,532-$1,555 million, and adjusted EBITDA is expected to be between $3,375 million and $3,405 million [13]. - System-wide RevPAR growth for 2024 is now expected to be 2-2.5%, down from the prior estimate of 2-3% [14].