REIT Earnings Season Is Underway: DiamondRock Posts Q2 Miss

DiamondRock Hospitality Company DRH disappointed investors with less than expected results for the second quarter. Both its adjusted FFO and revenue missed.

The REIT firm reported net income of $44.2 million, or EPS of $0.22, up from $24.8 million, or EPS of $0.12, in the year-ago period. Its adjusted funds flow from operations (FFO) also rose to $63.1 million from $61.5 million and adjusted FFO per share remained flat at $0.31. This missed by a penny from the Street estimate of $0.32.

DiamondRock's revenue advanced to $256.7 million from $249.8 million in the previous year period and missed the analysts' predictions of $257.83 million. One of the key metrics is RevPAR, which witnessed 0.8 percent growth to $197.52 over the preceding year period.

The company's president and CEO, Mark Brugger, commented, "We are well positioned to deploy capital opportunistically in response to future market dislocations, including through share repurchases. During the second quarter, our team and operators were highly effective in identifying cost efficiencies that resulted in an impressive Hotel Adjusted EBITDA margin of 36 percent."

Going forward, the company slashed its adjusted FFO per share outlook from $1.04-$1.09 to $0.99-$1.04 for the full year. Analysts' are looking for $1.04 a share of FFO. The company also reduced its comparable RevPAR growth outlook from 2–4 percent to zero to 1 percent for the same period.

On Thursday, the stock ended with a loss of $0.20, or 2.08 percent, to $9.42.