NYSE$SHO

Sunstone Hotel Investors Inc · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Sunstone's Q4 2019 operating results and earnings exceeded expectations, benefiting from continued investments in the portfolio.

Sunstone Hotel Investors reported better-than-expected fourth quarter and full year operating results and earnings in 2019, driven by continued investments in their portfolio. The company disposed of the leasehold interest in the Courtyard LAX for $50 million. Despite a challenging operating backdrop, fourth quarter comparable portfolio RevPAR increased 80 basis points over the prior year and comparable portfolio total revenues increased 2.1%.

  • Fourth quarter comparable portfolio RevPAR increased 80 basis points over the prior year.
  • Fourth quarter comparable portfolio total revenues increased 2.1%.
  • Full year RevPAR and total revenue growth reached 1.9% and 2.9%, respectively.
  • The company disposed of the leasehold interest in the Courtyard LAX for $50 million.

Headline financials

Total Revenue

$273M

Previous: $281M-2.8%
EPS (adj)

$0.26

Previous: $0.29-10.3%
Total Portfolio RevPAR

$0.80

No prior period
Cash & Equivalents

$680M

No prior period

Revenue & EPS history

Sunstone · Revenue · Quarterly

$273M

Q4 2019-2.8%vs Q4 2018
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Forward guidance

The company's baseline assumption for 2020 is that the operating environment will be similar to that witnessed in 2019, including tepid RevPAR and total hotel revenue growth.

Tailwinds

  • Healthy growth is anticipated in Key West.
  • Markets with strong citywide calendars, including Boston, Chicago, and Washington DC, are expected to perform well.
  • Recently completed renovations at the Renaissance Baltimore and Hilton San Diego Bayfront should result in RevPAR growth in excess of market levels.
  • Wailea Beach Resort is expected to be one of the strongest performers in 2020.
  • Group pace for the portfolio is up over 4%.

Headwinds

  • The majority of markets are anticipated to experience limited RevPAR growth in 2020.
  • San Francisco is expected to have challenging year-over-year comparisons given its strong performance in 2019.
  • Headwinds are expected to persist in New York due to elevated new supply.
  • Elevated cost pressures are expected to continue, primarily in wages and benefits, property taxes, and insurance.
  • The company is engaged in a dispute related to the scheduled ground rent increase at the Hilton Times Square.

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 Q4 2019

Historical avgQ4 2019

-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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