Sunstone Hotel Investors Earnings: Here’s Why the Stock is Down Now

Sunstone Hotel Investors Inc. (NYSE:SHO) delivered a profit and met Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.14%.

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Sunstone Hotel Investors Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 25% to $0.09 in the quarter versus EPS of $0.12 in the year-earlier quarter.

Revenue: Decreased 4.94% to $194.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sunstone Hotel Investors Inc. reported adjusted EPS income of $0.09 per share. By that measure, the company missed the mean analyst estimate of $0.09. It beat the average revenue estimate of $192.79 million.

Quoting Management: Ken Cruse, Chief Executive Officer, stated, “Our first quarter operating results met our expectations as we traded short-term displacement for expected future growth through the renovation of four of our hotels. Excluding the four hotels under renovation, our portfolio generated 6.5% RevPAR growth and achieved 160 basis points of margin expansion, driven by improving demand trends and solid expense controls. Also, during the first quarter, we continued to methodically improve our balance sheet by eliminating nearly $261 million of leverage through asset sales, and the retirement of senior debt and preferred securities.”

Key Stats (on next page)…

Revenue increased 4.64% from $186.25 million in the previous quarter. EPS decreased 70% from $0.30 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.34 to a profit $0.31. For the current year, the average estimate has moved down from a profit of $1.01 to a profit of $0.91 over the last ninety days.

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