3 key takeaways from Hilton Worldwide’s Q1 earnings report

Hilton Worldwide Holdings Inc. (NYSE: HLT) reported its financial results for the fiscal first quarter on Wednesday that came in shy of the Wall Street estimates on weak demand due to the ongoing Coronavirus pandemic.

1. Financial performance

Hilton reported £77.63 million of loss in the first quarter that translates to 28.03 pence per share. In the same quarter last year, it had posted £12.94 million of net income, or 4.31 pence per share. Adjusted for special items, the hospitality company earned 1.44 pence per share. The McLean-based firm had reported £161.49 million of net loss in the prior quarter (Q4).

Hilton valued its revenue in Q1 at £628.23 million versus the year-ago figure of £1.38 billion. According to FactSet, experts had forecast the company to print £780 million of revenue in the recent quarter. Their estimate for adjusted per-share earnings stood at a higher 5.03 pence.

2. Cash position

Hilton Worldwide had £1.76 billion of total cash and equivalents as of 31^st March, including restricted cash and equivalents worth £32.35 million.

On a currency-neutral basis, the American multinational saw a 38.4% year over year decline in Q1 revenue per available room. Roughly 275 of its properties, as per Hilton Worldwide, had to cut operations in the first quarter, primarily in Europe and the United States, due to the COVID-19 crisis. In comparison, 730 of its properties had a taken a hit in Q1 of the previous year.

3. CEO Christopher Nassetta’s remarks

Commenting on the earnings report, CEO Christopher Nassetta said on Wednesday:

“While rising COVID-19 cases and tightened travel restrictions, particularly across Europe and our Asia Pacific region, weighed on demand in January and February, we saw meaningful improvement in March and April. We expect this positive momentum to continue as vaccines are more widely distributed and our customers feel safe travelling again. We continue to grow our portfolio of hotels in exciting destinations throughout the world, giving our guests more options than ever before to make a Hilton hotel a part of their plans as travel resumes.”

In separate news on Wednesday, Unilever said the majority of its shareholders voted in favour of the climate action plan.

Impact on the share price

Hilton Worldwide tanked 1% in premarket trading on Wednesday and lost another 1.5% on market open to trade at £90 per share versus £77 per share at the start of the year. At the time of writing, the NYSE-listed firm is valued at £25 billion.