Host Marriott

(HMT)

reported a stronger first quarter Wednesday, meeting Wall Street estimates as the lodging recovery rolled along. It also raised guidance.

The nation's largest lodging real estate investment trust reported first-quarter net income of $6 million, a significant improvement over its $31 million loss a year before. On a per-share basis, Host Marriott lost 1 cent in the latest quarter because of dividend payments to preferred shareholders.

Adjusted funds from operations, or FFO, which is what Wall Street uses to gauge the company's performance, was 23 cents a share, a penny higher than the average analyst estimate of 22 cents from Thomson First Call. A year earlier, adjusted FFO was 17 cents. Adjusted FFO for both periods excluded a debt-refinancing charge of 4 cents a share.

Shares fell 4 cents to $16.71.

Revenue increased 5.3% to $818 million from $777 million but fell short of the $876.7 million analyst consensus.

Stronger lodging demand boosted occupancy by half a percentage point at hotels the company owned at least a year. It also enabled Host Marriott to increase its average room rates by 6.8%.

Revenue per available room, a key industry metric also known as revpar, increased 7.6% at comparable hotels, while adjusted operating margins improved by 1 percentage point.

"Our first-quarter results were driven by significant increases in average room rates, which resulted in us achieving strong revpar growth for the quarter," said Christopher J. Nassetta, the company's CEO. "We are confident that we can build on this early momentum and that operating results will continue to improve for the remainder of the year."

The company raised full-year revpar guidance to 7% to 9% from its previous range of 6.5% to 8.5%. In line with that forecast, Host Marriott now expects full-year EPS of 23 cents to 32 cents, vs. previous guidance of 18 cents to 28 cents.

The company foresees adjusted FFO per share of $1.10 to $1.18 for the year, in line with the $1.15 analyst consensus.