Orient-Express Shares Play Catch Up
HAMILTON, Bermuda (
) -- Shares of
Orient-Express Hotels
(OEH)
soared nearly 20% Wednesday, trading at triple their average three-month trailing volume, after the hotel and travel company drastically narrowed its quarterly losses.
Most hotel operators traded higher in the session but Orient-Express led the pack, closing the day up 18.5% at $10.90. Fellow small-cap hoteliers
Maui Land & Pineapple
(MLP) - Get Report
jumped 9.1%,
Silverleaf Resorts
(SVLF)
4.2% and
Home Inns & Hotels Management
(HMIN)
3.3%. The
iShares Morningstar Small Growth
(JKK) - Get Report
, an exchange-traded fund that counts Orient-Express among its holdings, gained 1.3% Wednesday.
The Bermuda-based hotelier's overall performance was "a solid and better than expected report driven by international markets,"
Citigroup
(C) - Get Report
analysts said.
Orient-Express' big stock price move was largely a result of its shares catching up with other lodging names, analysts said. A roster of hotel operators, including midcaps
Marriott International
(MAR) - Get Report
,
Hyatt Hotels
(H) - Get Report
and
Starwood Hotels & Resorts
(HOT)
, saw their share prices rise more than 30% in 2010, while Orient-Express shares were lower by 9.3% year-to-date at the close of trading Tuesday, before Wednesday's leap. OEH is now up 7.5% this year.
Orient-Express' quarterly performance was far from stellar, but results were a marked improvement from the corresponding period in 2009. Net losses came to $800,000, or a penny per share, compared with year-earlier losses of $24.3 million, or 36 cents per share, in line with analysts' expectations. Adjusted profits were $3.4 million, or 4 cents per share.
Same store revPAR, or revenue per available room, a key metric in the hotel industry, grew last quarter in every region Orient-Express operates, with North America up 16% in local currency. RevPar in South Africa surged 57%, 32% in South America, 12% in Asia Pacific and 1% in Europe.
"Weak local currency revPAR in Europe may concern investors, as the
third quarter is OEH's most important quarter and highly dependent on Europe," Citigroup analysts cautioned. "Upside was of mixed quality, with about half coming from insurance proceeds related to PeruRail flood damage, and the remainder from higher core hotel earnings."
Orient-Express, the owner or part-owner of 50 hotel and travel properties in 24 countries, including deluxe hotels, tourist trains and canal cruise businesses, said its quarterly revenue and earnings included insurance income of $2.8 million from PeruRail, which was impacted by the damage to tracks caused by regional floods during the first quarter of 2010.
-- Reported by Miriam Marcus Reimer from New York.
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