Hotel shares were in the green on Friday, after
LaSalle Hotel Properties
posted first-quarter profit well above Wall Street forecasts and the stock received an analyst upgrade.
The company saw shares rise 7% to $11.88 in afternoon trading. The stock has been trading between $3.56 and $34.45 over the past 52 weeks.
LaSalle reported that its funds from operation, or FFO, were $8.6 million, or 21 cents a share, compared with $9.8 million, or 24 cents a share, a year ago. Analysts expected FFO of 1 cent a share.
FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for real-estate investment trusts as it provides a more accurate picture of cash performance.
The company's revenue per available room, or revpar, fell 11.8% during the quarter, marred by the decline in occupancy levels and average daily room rates. Revenue per available room, or revpar, is considered a key gauge of a hotel's performance.
Analysts said LaSalle's revpar was higher than its competitors in part because its Washington, D.C. hotels got a boost from the presidential inauguration.
Stephanie Krewson, analyst at Janney Montgomery Scott, upgraded the stock to buy on Friday, saying LaSalle's cost-saving initiatives helped offset the drop in hotel demand that has been hurting the industry. She added that its leveraged balance sheet should allow it to survive the downturn and potentially acquire high-end hotels in 2010 from distressed sellers.
The news provided a boost for the rest of the hotel industry. Shares of
Hot Hotels & Resorts
are up 8% to $7.65, despite being downgraded today by an analyst at Stifel Nicolaus.
Ashford Hospitality Trust
grew 9% in afternoon trading, while
Strategic Hotels & Resorts
rose 13% to 92 cents.
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