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Hyatt Hotels in 3Q15: Evaluating Revenue and Activity

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Price movement after 3Q15 earnings report

In 3Q15, Hyatt Hotels Corporation (H) had a price movement of $7.1 billion. But Hyatt’s YTD (year-to-date) price movement fell quarter-over-quarter in 2015. After the company’s 3Q15 earnings report, Hyatt’s stock fell by 1.31% to close at $49.76 per share on November 3, 2015—a 5.3% fall in revenue for the quarter. The company’s price movement on weekly, monthly, and YTD basis was -1.6%, -0.52%, and -17.4%, respectively.

Technically, the stock broke the support of 20-day, 50-day, and 200-day moving average throughout 2015. As of November 3, 2015, it was trading at -1.6% below the 20-day moving average, -0.86% below the 50-day moving average, and -10.9% below the 200-day moving average.

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The iShares Enhanced US Small-Cap ETF (IESM) invests 1.8% of its holdings in Hyatt Hotels. The ETF aims to outperform broad US large-cap equities. The actively managed fund selects firms with higher earnings quality, lower relative valuation, and smaller market capitalization. The YTD price movement of IESM as of November 3 was -1.4%. The iShares Morningstar Mid-Cap Growth Index Fund (JKH) invests 0.19% of its holdings in Hyatt Hotels.

Hyatt Hotels’ major competitors by market capitalization include:

  • Hilton Worldwide Holdings (HLT)—$25.2 billion
  • Marriott International (MAR)—$19.7 billion
  • Starwood Hotels & Resorts Worldwide (HOT)—$13.2 billion
  • InterContinental Hotels Group (IHG)—$9.5 billion

Performance in 3Q15

Hyatt Hotels reported 3Q15 net revenues of $1.05 billion, a fall of 5.3% when compared to its net revenue of $1.11 billion in 2Q15. The company’s revenue from owned and leased hotels and management and franchising fell by 7.4% and 10.3%, respectively, in 3Q15.  Revenue from base management fees and incentive management fees fell by 4.1% and 23.3%, respectively, whereas revenue from franchise fees rose by 9.1% in 3Q15.

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Meanwhile, Hyatt’s number of properties and rooms rose to 627 and 161,796 in 3Q15, an increase of 1.4% and 0.99% on a quarterly basis. The company’s 3Q15 net income and EPS (earnings per share) fell by 37.5% and 33.3%, respectively, on a quarter-over-quarter basis to $25 million and $0.18 per share, respectively.

In 3Q15, some of the key activities of Hyatt Hotels were:

  • The company opened Hyatt Regency Naha, Okinawa (the first hotel under a Hyatt brand on the Japanese island of Okinawa), and Hyatt Regency Wuhan Optics Valley.
  • Hyatt Hotels and TPG Hospitality opened Hyatt House Atlanta-Downtown.
  • The company announced a management agreement with Essendon Fields (EFPL) for a Hyatt Place hotel in Melbourne, Australia.
  • It officially opened Hyatt Place Dubai-Baniyas Square, Hyatt Place Buffalo-Amherst, and Hyatt Place Bloomington-Normal.
  • Hyatt Place Los Cabos in Baja California Sur, Mexico, reopened in Los Cabos after suffering extensive damage from Hurricane Odile in 2014.
  • The company entered into a management agreement with SECO Development for a Hyatt Regency hotel in Renton, Washington.

About Hyatt Hotels

Hyatt Hotels Corporation is a hospitality company. Its subsidiaries develop, own, operate, manage, franchise, license, or provide services to hotels, resorts, branded residences, and vacation ownership properties.

Read the corresponding part of this series for an in-depth comparison of Hyatt Hotels with its competitors and for a look at related ETFs.

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