Chesapeake Lodging Trust (CHSP) has reported a 4.54 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $25.95 million, or $0.40 a share in the quarter, compared with $27.18 million, or $0.42 a share for the same period last year.
Revenue during the quarter went down marginally by 0.29 percent to $164.53 million from $165.01 million in the previous year period.
Cost of revenue for the quarter was almost stable at $52.76 million, when compared with the previous year period. Gross margin for the quarter contracted 16 basis points over the previous year period to 67.93 percent.
Total expenses were $130.30 million for the quarter, up 0.82 percent or $1.06 million from year-ago period. Operating margin for the quarter contracted 87 basis points over the previous year period to 20.81 percent.
Operating income for the quarter was $34.23 million, compared with $35.77 million in the previous year period.
Chesapeake Lodging Trust projects net income to be in the range of $7.20 million to $9.30 million for the fourth-quarter. For financial year 2016, Chesapeake Lodging Trust projects net income to be in the range of $64.10 million to $66.20 million. The company expects diluted earnings per share to be in the range of $0.12 to $0.16 for the fourth-quarter. For fiscal year 2016, the company expects diluted earnings per share to be in the range of $1.09 to $1.13.
Occupancy revenue was $127.55 million for the quarter, down 0.65 percent or $0.84 million. Food and beverage revenue during the quarter was almost stable at $29.63 million, when compared with the previous year period. Revenue from other hotel operating activities was $7.34 million for the quarter, up 4.90 percent or $0.34 million from year-ago period.
“Pricing pressure from corporate customers continues to be the primary headwind for our portfolio in the second half of 2016,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. “Although our operators have been able to hold occupancy levels at our hotels at historically high levels, ADRs have been pressured more than expected which in turn has impacted our operating results and margins. In addition, our fourth quarter operating results are expected to be negatively impacted by approximately $1.5 million as a result of the Zika virus and Hurricane Matthew in Miami and operational challenges at our hotels in New Orleans, which we are working to correct. Furthermore, management fee waivers received and favorable property tax adjustments recorded at several of our hotels last year totaling $1.5 million negatively impact our margin comparison in the fourth quarter. We and our hotel operators are intensely focused on both revenue management and cost containment and reduction measures to minimize the impact of the current revenue trends we are experiencing.”
Operating cash flow improves
Chesapeake Lodging Trust has generated cash of $122.01 million from operating activities during the nine month period, up 12.31 percent or $13.38 million, when compared with the last year period.
The company has spent $16.34 million cash to meet investing activities during the nine month period as against cash outgo of $284.45 million in the last year period.
The company has spent $99.30 million cash to carry out financing activities during the nine month period as against cash inflow of $192.22 million in the last year period.
Cash and cash equivalents stood at $56.91 million as on Sep. 30, 2016, up 24.43 percent or $11.17 million from $45.74 million on Sep. 30, 2015.
Receivables move up marginally
Net receivables were at $26.81 million as on Sep. 30, 2016, up 1.12 percent or $0.30 million from year-ago.
Total assets went down marginally by 2.38 percent or $50.30 million to $2,065.43 million on Sep. 30, 2016. On the other hand, total liabilities were at $863.63 million as on Sep. 30, 2016, down 3.72 percent or $33.40 million from year-ago.
Return on assets moved down 3 basis points to 1.65 percent in the quarter. At the same time, return on equity moved down 7 basis points to 1.96 percent in the quarter.
Debt comes down marginally
Total debt was at $749.98 million as on Sep. 30, 2016, down 4.33 percent or $33.94 million from year-ago. Shareholders equity stood at $1,201.80 million as on Sep. 30, 2016, down 1.39 percent or $16.90 million from year-ago. As a result, debt to equity ratio went down 2 basis points to 0.62 percent in the quarter.
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