The company said that weak hotel demand in August and September forced it to lower its revenue per available room growth expectations to between 3.5% and 4.5% from its previous growth expectations between 4.5% and 5.5%.
The company also said its expects pro forma EBITDA to now be between $393 million and $400 million, down from its previous view between $398 million and $404 million.
Hilton shares are falling on heavy volume as 9 million shares have been traded so far today versus its daily moving average of 8.2 million shares.
Separately, TheStreet Ratings team rates HILTON WORLDWIDE HOLDINGS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate HILTON WORLDWIDE HOLDINGS (HLT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- HILTON WORLDWIDE HOLDINGS's earnings per share declined by 23.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HILTON WORLDWIDE HOLDINGS increased its bottom line by earning $0.68 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.68).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, HILTON WORLDWIDE HOLDINGS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income has decreased by 23.0% when compared to the same quarter one year ago, dropping from $209.00 million to $161.00 million.
- The debt-to-equity ratio is very high at 2.19 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, HLT maintains a poor quick ratio of 0.77, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: HLT