DiamondRock Hospitality Q2 FFO Rises; Lifts 2014 Adj. EPS View - Quick Facts

(RTTNews) - DiamondRock Hospitality Co. (DRH) reported that its second-quarter of 2014 funds from operations rose to $75.75 million from $42.27 million in the year ago quarter.

Adjusted Funds from operations per share was $0.26 up from $0.22 last year.

Net income for the quarter surged to $51.92 million from last year's $15.07 million, with basic earnings per share improving to $0.27 from $0.08 in the prior year.

Pro Forma RevPAR was $169.21 up from $151.27 last year.

Total revenues for the quarter were $229.93 million, up from $218.01 million last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share and revenues of $231.99 million. Analysts' estimates typically exclude special items.

The Company said it is under contract to purchase the 282-room hotel being constructed in Times Square for a fixed price of approximately $127 million, or $450,000 per key. The hotel will be branded a Hilton Garden Inn and be operated by Highgate Hotels, the largest operator of hotels in New York City. The balance of the acquisition price, which is approximately $100 million, is expected to be with corporate cash on hand. The Company currently expects the hotel to open during September and continues to expect the hotel to generate approximately $5.0 million of Hotel Adjusted EBITDA during 2014.

The Company continues to expect to spend approximately $95 million on capital improvements at its hotels in 2014, of which approximately $45 million relates to the completion of the $140 million capital improvement program and approximately $50 million relates to new 2014 capital projects. The Company does not expect any material disruption from capital projects in 2014.

The Company's Board of Directors declared a quarterly dividend of $0.1025 per share to stockholders of record as of June 30, 2014. The dividend was paid on July 10, 2014.

The company raised its 2014 Adjusted FFO to a range $165 million - $172 million or $0.84 - $0.88 per share from the prior estimate of $163 million - $170 million or $0.83 - $0.87 per share. Analysts project annual earnings per share of $0.86.

Annual adjusted EBITDA is expected to be in the range of $225.5 million - $235.5 million compared to prior outlook of $223 million- $233 million.

The Company expects approximately 26% of full year 2014 Adjusted EBITDA and Adjusted FFO to be earned during the third quarter 2014.