Hospitality Properties Misses Estimates

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On March 2, 2009, Hospitality Properties Trust ( HPT) reported that its Q4 FY08 funds from operations (FFO) decreased 18.5% to $88.24 million, or $0.94 per share, from $108.27 million, or $1.15 per share, in the prior year's quarter. Net income available to common shareholders plunged 37.5% to $47.46 million, or $0.51 per share, from $75.98 million, or $0.81 per share, hurt by lower revenue due to TravelCenter's deferral of rent and the non-accrual of straight-line rent. The quarterly FFO missed the consensus estimate of $0.94 per share.

Total revenue slipped 13.7% to $282.14 million from $326.76 million in Q4 FY07 dragged down by lower revenue across segments. Hotel operating revenue fell 12.3% to $199.08 million from $227.03 million a year ago. Rental income decreased 17.4% to $72.61 million from $87.95 million in the year-ago quarter. Additionally, FF&E reserve income declined marginally to $5.22 million, while interest income fell to $135,000 from $436,000 last year. Finally, percentage rent dropped 15.7% to $5.10 million from $6.06 million on a year-over-year basis.

During the quarter under review, revenue per available room dipped 9.7% to $67.65 from $74.92, while average daily rate decreased 2.6% to $106.20 from $109.06. Occupancy stood at 63.7% compared to 68.7% in Q4 FY07. Recently, HPT paid a regular quarterly common dividend of $0.77 per share.

For FY08, total revenue slipped 2.6% to $1.25 billion from $1.29 billion in the previous year. Net income available to common shareholders plummeted 65.8% to $104.12 million, or $1.11 per share, from $304.20 million, or $3.27 per share. Furthermore, FFO for the year declined 8.2% to $396.39 million, or $4.22 per share, from $431.85 million, or $4.64 per share, in FY07.

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