Hilton Worldwide Holdings Inc. (HLT – Free Report) is expected to release fourth quarter 2021 results on February 16, before the opening bell. In the most recently reported quarter, the company’s earnings beat Zacks’ consensus estimate by 2.5%.
Fourth quarter estimates
Zacks’ consensus estimate for fourth-quarter net income is set at 71 cents per share. In the prior year quarter, the company posted an adjusted loss per share of 10 cents. The revenue consensus mark was $1.71 billion, suggesting 91.9% growth over the prior year quarter.
Factors to note
Hilton’s performance in the fourth quarter of 2021 likely benefited from the removal of permitted operational and capacity restrictions, an increase in travel, a gradual increase in demand, new hotel openings, hotel conversions and new project developments. Rising leisure demand coupled with a rebound in transient and group businesses may have helped the company’s performance in the quarter to report. A focus on enhanced partnerships and points redemption offers for its loyalty program – Hilton Honors – likely contributed to the fourth quarter performance.
Zacks consensus estimate for Base revenue and other management fees is set at $58 million, indicating growth of 87.1% from $31 million in the quarter. last year. Incentive management fees are currently projected at $29.5 million, indicating growth of 126.9% from $13 million in the prior year quarter. Revenue from owned and leased hotels is estimated at $202 million, indicating a 134.9% improvement from $202 million in the prior year quarter. Other revenue from managed and franchised properties is expected to be $979 million, up 93.5% year-over-year.
However, high operating and fixed costs resulting from the pandemic may have hurt margins in the quarter ahead. Although RevPAR and occupancy have likely improved sequentially, it is likely to remain well below pre-pandemic levels.
What our model says
Our proven model does not conclusively predict an earnings beat for Hilton this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. But it is not the case here.
ESP Earnings: Hilton has an ESP of -5.02%. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.
Zack’s Ranking: The company has a Zacks rank #3. You can see the full list of today’s Zacks #1 Rank stocks here.
Stocks should beat earnings
Here are some stocks from the Zacks Consumer Discretionary space that investors can consider as our model shows they have the right mix of elements to post a pace of earnings:
Cedar Fair, LP (FUN – Free Report) has a +6.02% Earnings ESP and a #1 Zacks Rank.
Cedar Fair shares have gained 43.5% over the past year. FUN’s earnings have exceeded the consensus mark three times in the past four quarters and missed once, with the average surprise being 16.5%.
Oxford Industries, Inc. (OXM – Free Report) has a +1.86% earnings ESP and a #2 Zacks rank.
Oxford Industries shares have appreciated 15.9% over the past year. OXM’s earnings have exceeded the consensus mark three times in the past four quarters and missed once, with the average surprise at 96.7%.
PlayAGS, Inc. (AGS – Free Report) has a +5.66% Earnings ESP and Zacks Rank #2.
Shares of PlayAGS have jumped 20.9% over the past year. AGS earnings have beaten the consensus mark three times in the past four quarters and missed it once, with the average surprise being 33.3%.
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