NYSE$SHO

Sunstone Hotel Investors Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Sunstone's third-quarter results were impacted by the global pandemic, however, the company saw several signs that the recovery that began in May and June appeared to be gaining steam.

Sunstone Hotel Investors reported a challenging third quarter due to the ongoing global pandemic. Despite the difficulties, the company saw positive signs of recovery, with sequential monthly gains in occupancy and improved transient room reservations. The company is focused on reducing cash burn and maintaining a strong liquidity position.

  • Comparable portfolio revenues were $24 million and RevPAR was $17.58, which represents a decline of 91% and 92% respectively, compared to the third quarter of last year.
  • The company has successfully resumed operations at the majority of its hotels.
  • Those hotels that have been open, in general, have achieved sequential monthly gains in occupancy.
  • Transient room reservations have gradually improved over the past few months.

Headline financials

Total Revenue

$28.9M

Previous: $282M-89.7%
EPS (adj)

-$0.26

Previous: $0.29-189.7%
Total Portfolio RevPAR

$17.58

No prior period
Capital Expenditures

-$45.3M

Previous: -$75.5M+39.9%
Free Cash Flow

-$136M

Previous: -$41.9M-225.5%
Net Income

-$91.1M

Previous: $33.5M-371.6%
Operating Income

-$107M

Previous: $42.3M-354.1%
Cash & Equivalents

$461M

Previous: $730M-36.8%
Total Assets

$3.25B

Previous: $3.9B-16.7%

Revenue & EPS history

Sunstone · Revenue · Quarterly

$28.9M

Q3 2020-89.7%vs Q3 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Forward guidance

The company expects portfolio performance to improve in the fourth quarter and beyond now that several of their larger hotels have resumed operations. The company estimates a total monthly corporate cash burn rate before capital investment of approximately $16 to $20 million a month.

Tailwinds

  • The company has successfully resumed operations at the majority of its hotels.
  • Those hotels that have been open, in general, have achieved sequential monthly gains in occupancy.
  • Transient room reservations have gradually improved over the past few months.
  • Group production, which remains well off normal levels, increased on a sequential basis.
  • The company's monthly cash burn rate has been further reduced as well as their significant liquidity position.

Headwinds

  • Nearly all of the group business cancelled in the third quarter.
  • Group cancellations in the first quarter of 2021 have increased.
  • Group business will not return in scale until there is greater comfort in traveling and congregating.
  • Group business is unlikely to return in a meaningful way until a vaccine or reliable therapeutics are developed.
  • The third quarter adjusted EBITDA was a loss of $36 million

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

-0.0%

Avg return

Earnings day

+0.6%

Avg return

5 days after

+1.0%

Avg return

30 days after

45%

29 / 65 earnings

Positive

+20.1%

Q3 2020

Best reaction

-10.0%

Q4 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.2%+8.0%+18.3%
Q4 2025-3.7%+0.5%-7.3%
Q3 2025+1.8%+2.5%-3.8%
Q1 2025-2.9%+0.5%+0.8%
Q4 2024-5.8%-8.2%-13.9%
Q3 2024-4.1%-7.3%+12.5%
Q2 2024+0.0%-1.6%+2.4%
Q1 2024+1.9%+0.7%+0.3%
Q4 2023-0.1%+0.6%-1.5%
Q3 2023-1.5%+0.6%+5.6%
Q2 2023+0.0%-0.6%-6.0%
Q1 2023+3.5%+5.5%+4.9%
Q4 2022+7.0%+7.4%-11.6%
Q3 2022-4.0%+4.5%-0.7%
Q2 2022-0.5%+0.5%-2.4%
Q1 2022-4.9%-7.8%+1.4%
Q4 2021-10.0%-7.6%+0.9%
Q3 2021+2.2%-0.9%-15.1%
Q2 2021-1.2%-0.2%+2.7%
Q1 2021-2.1%-3.2%-2.1%
Q4 2020+6.3%+8.8%+15.5%
Q3 2020+20.1%+19.4%+38.1%
Q2 2020+4.1%+10.7%+14.7%
Q1 2020-9.5%-18.8%+13.7%
Q4 2019-1.8%-1.9%-46.8%
Q3 2019+3.3%+0.6%-1.2%
Q2 2019+0.7%-0.9%-0.5%
Q1 2019-2.3%-1.9%-6.7%
Q4 2018+2.7%+3.1%+3.2%
Q3 2018+1.5%+4.4%+2.8%
Q2 2018+0.7%+1.2%+3.3%
Q1 2018+1.8%+3.3%+6.8%
Q4 2017-0.4%-1.6%-5.9%
Q3 2017-0.8%+0.2%+0.9%
Q2 2017-1.1%+0.7%-2.9%
Q1 2017+2.6%+5.2%+5.3%
Q4 2016-0.9%-2.8%-2.8%
Q3 2016-1.9%-1.4%+19.2%
Q2 2016+2.1%+0.5%-2.4%
Q1 2016-1.2%
Q4 2015+1.4%
Q3 2015+1.6%
Q2 2015+1.8%
Q1 2015-1.0%
Q4 2014+0.8%
Q3 2014-1.0%
Q2 2014+1.8%
Q1 2014+1.9%
Q4 2013+2.1%
Q3 2013+2.1%
Q2 2013+1.0%
Q1 2013+2.0%
Q4 2012-2.0%
Q3 2012-3.2%
Q2 2012+1.6%
Q1 2012+2.0%
Q4 2009-1.8%
Q4 2011-1.8%
Q3 2011-2.9%
Q3 2010-2.9%
Q2 2011-3.1%
Q2 2010-3.1%
Q1 2011-1.5%
Q1 2010-1.5%
Q4 2010-1.5%

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