BETHESDA, Md. (
) -- Shares of
(DRH - Get Report)
fell several points in early morning trading Tuesday after the lodging
real estate investment trust
posted weaker-than-expected third-quarter results.
DiamondRock shares fell 0.2%, off earlier lows, after the lodging REIT booked a third-quarter loss of $3.5 million, or 2 cents per share, compared with year-earlier earnings of $800,000, or a penny per share. Analysts expected the firm to book earnings of $900,000.
Despite the disappointing net loss, CEO Mark W. Brugger was optimistic about strengthening trends in the lodging industry.
"The positive third quarter results reaffirm our conviction that a sustainable lodging recovery continues to build momentum," he said.
Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, in the recent quarter were $33 million, up from $27.5 million in the third quarter last year.
Adjusted funds from operations, or FFO, grew 6.7% to $22.4 million, or 15 cents per share, from $21 million, or 19 cents per share, in the year-earlier period. FFO is a performance figure generally used by REITs to define cash flow from operations.
Revenue per available room, known as RevPAR and a key hotel industry metric, increased 5% to $113.38 on a pro forma basis in the quarter ended Sept. 10, assuming DiamondRock owned all of its 23 hotels for the entire third quarters of 2010 and 2009.
Including new acquisitions only for the company's 2010 ownership period, third-quarter RevPAR increased 4.4 percent $111.94 from $107.25, driven by a 1.5% increase in occupancy to 75% from 73.5% and a 2.3% increase in the average daily rate to $149.35 from $145.93.