Hilton Worldwide Holdings Reports Third Quarter 2024 Earnings
Hilton Worldwide Holdings Inc. (NYSE: HLT) reported its financial results for the third quarter of 2024.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Year-over-Year Change | Wall Street Consensus |
|---|---|---|---|---|
| Diluted EPS | $1.38 | $1.44 | Decreased 4.2% | |
| Diluted EPS, adjusted | $1.92 | $1.67 | Increased 15% | $1.85 |
| Net Income (in millions) | $344 | $379 | Decreased 9.2% | |
| Adjusted EBITDA (in millions) | $904 | $834 | Increased 8.4% |
Interpretation: Hilton's EPS, adjusted for special items, surpassed Wall Street expectations, signifying robust operational performance despite a decrease in net income year-over-year. The increase in Adjusted EBITDA reflects strong cost management and operational efficiency.
Key Developments and Operational Highlights
- Approved 27,500 new rooms for development, boosting the development pipeline to 492,400 rooms.
- Added a record 36,600 rooms to their system during the quarter.
- Repurchased 3.3 million shares, contributing to a total return of $764 million to shareholders for the quarter.
- Issued $1.0 billion in Senior Notes due 2033 at a 5.875% interest rate.
- Paid a quarterly dividend of $0.15 per share, totaling $37 million.
Executive Commentary
Christopher J. Nassetta, President & CEO, emphasized Hilton's strong bottom-line performance exceeding expectations amidst slower top-line growth due to various macroeconomic factors. The company marked record room openings, indicating resilience and strategic advancement in its operational model.
Dividends and Share Repurchase Program
Hilton continued its shareholder returns with dividends amounting to $113 million year-to-date and a share repurchase program, returning over $2.4 billion to shareholders in 2024 through October.
Forward Guidance
For the full year 2024, Hilton projects: - System-wide RevPAR to increase between 2.0% and 2.5%. - Diluted EPS to range between $5.58 and $5.68. - Net income to be between $1,405 million and $1,429 million.
Stock Price Movement
Following the earnings release, Hilton's stock shifted by -1.73%.
In summary, Hilton managed to outperform earnings expectations in a challenging economic environment, demonstrated by strategic growth in room openings and a solid return of capital to shareholders. The company remains optimistic about sustaining growth into 2025, with anticipated net unit growth between 6% and 7%.
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