BETHESDA, Md. (

TheStreet

) --

Host Hotels & Resorts

(HST) - Get Report

is expected post a wider year-over-year loss for its fiscal third quarter.

Host Hotels & Resorts, a lodging real estate investment trust, is due to report its quarterly results Wednesday morning. Analysts' consensus call is for a quarterly loss of $65.4 million, or 11 cents per share. In the third quarter of 2009, Host booked a loss of $58 million, or 9 cents per share.

While losses likely widened, Host's revenue is expected to have grown 6.5% to $971.1 million, from $912 million in the year-earlier period.

Host, which owns and operates hotels under the Four Seasons, W and Ritz-Carlton brands, among others, is expected to report funds from operations, or FFO, of 11 cents per share, flat year-over-year. FFO is a performance figure generally used by REITs to define cash flow from operations.

Hudson Securities analyst Robert LaFleur expects Host's FFO to come in at 10 cents per share, a penny below Wall Street's consensus. LaFleur expects Host to meet or exceed his estimates as industry revPAR trends, or revenue per available room, were solid throughout the quarter, according to data from

Smith Travel Research

, a market research firm.

LaFleur expects Host grew revPAR 9.6% in the quarter, driven by an increase of 450 basis points in occupancy and a 3% increase in average daily room rates.

LaFleur likes Host's business, strategy and management but feels the share price, above $15 for much of October so far, already reflects the strong fundamentals and is fairly valued.

Potential risks to the company include a slowdown in the economy that could "reduce travel spending and negatively impact consumer demand for timeshare purchases." Sovereign debt issues that have plagued several European nations this year could negatively impact Host's 32% interest in a European joint venture that owns 11 hotels in the region. A lower valued euro could also pressure the lodging REIT's financial results from its European operations.

Marriott International

(MAR) - Get Report

, from which Host spun off in 1993, said last week it swung to a third-quarter profit, boosted by stronger corporate and leisure travel demand. Net income came in at $83 million, or 22 cents per share, compared with a year-earlier loss of $466 million, or $1.31 per share. Revenue increased to $2.65 billion, from $2.47 billion.

Marriott's results met expectations.

"It was a decent quarter, but it only met expectations," Deutsche Bank analyst Chris Woronka told

Reuters

. "The stock's had a really good run. It can't go up forever," commenting on Marriott's stock decline the day it reported.

Host surprised to the upside when it reported second-quarter results, swinging to year-over-year profitability, and raised its full-year guidance, setting higher expectations for other firms in the space.

>>Host Earnings Set Tone For Lodging REITs

Still, Host's accounting rules differ from most other names in the space so comparisons can be difficult. After spinning off from Marriott Host adopted its former parent's accounting practices whereby its first, second and third quarters measures just 12 weeks; its fourth quarter includes 16 weeks. In other words, half of Host's portfolio, including its Starwood and Marriott properties, for the fiscal third quarter won't have the full benefit of the month of September.

Host said in July its second-quarter FFO was 23 cents per share, or $151 million, up sharply from year-earlier FFO of 12 cents per share, or $68 million. Host booked profits of $20 million, or 2 cents per share, compared with a loss of $69 million, or 12 cents per share, in the year-earlier period. Revenues in the quarter added 5.7% to $1.11 billion, up from $1.05 billion in the second quarter last year. Analysts had expected the firm to book a loss of a penny per share.

At the time, management raised full-year guidance, saying it expected to book a net loss between 24 cents and 21 cents per share for 2010, compared with a previously announced forecast for losses in the range of 32 cents to 25 cents per share. The midpoint guidance for FFO was revised upward to 68 cents per share from 61.5 cents. Host said revPar should grow between 4% and 4.5%, up from prior estimates of 1% to 4%.

-- Written by Miriam Marcus Reimer in New York.

>To follow the writer on Twitter, go to

@miriamsmarket

.

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