Ashford Hospitality Trust Earnings: Here’s Why the Stock is Down Now

Ashford Hospitality Trust Inc. (NYSE:AHT) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.05%.

Ashford Hospitality Trust Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 5.77% to $0.55 in the quarter versus EPS of $0.52 in the year-earlier quarter.

Revenue: Rose 3.52% to $258.84 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ashford Hospitality Trust Inc. reported adjusted EPS income of $0.55 per share. By that measure, the company missed the mean analyst estimate of $0.59. It missed the average revenue estimate of $261.96 million.

Quoting Management: “We are excited about the planned spin-off of Ashford Prime and believe this transaction will help unlock the relative imbedded value in this portfolio of high RevPAR hotels located predominantly in domestic and international gateway markets. Further, since the cash from our recently completed follow-on offering will be contributed to Ashford Prime, it has put us much closer to our target net debt plus preferred equity to EBITDA ratio of 5.0x or less for this platform than we were prior to the offering. For example, if an annual base management fee of $5.0 million is used as an estimate, and if incremental annual G&A costs are $4.0 million, the trailing 12-month net debt plus preferred equity to EBITDA ratio as of the end of the second quarter for the Ashford Prime portfolio was around 6.5x,” commented Monty J. Bennett, Ashford’s Chairman and Chief Executive Officer. “We are very optimistic regarding Ashford Prime’s prospects given its high-quality portfolio, well-defined investment strategy, low leverage capital structure, and our management team’s proven track record of delivering asset growth and superior shareholder returns. Ultimately, we believe this spin-off will offer us an exceptional high-growth platform with enhanced access to the capital markets and will serve the best interests of our shareholders as both Ashford Prime and Ashford Trust continue to capitalize on the attractive lodging industry fundamentals we expect to persist for the next several years.”

Key Stats (on next page)…

EPS increased 57.14% from $0.35 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.37 to a profit $0.38. For the current year, the average estimate has moved down from a profit of $1.70 to a profit of $1.63 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)