Home Inns Rebounds As Outlook Trumps Profit Miss
Posted 05:07 PM ET
China-based Home Inns & Hotels Management's (HMIN)
stock fell as much as 7% intraday Tuesday before it rebounded to close
up 2.5% after initial disappointment over its profit miss was offset by a
stronger-than-expected sales outlook.
Home Inns posted a 14-cent-a-share profit for the fourth quarter, up from a 12-cent loss a year earlier, but still 2 cents below Wall Street projections. Revenue rose 13% to $220.8 million, a tad under estimates of $221.9 million.
This quarter, however, the regional hotel chain forecast revenue of $222.3 million to $227.1 million, higher than the $212.8 million consensus estimate of 11 analysts polled by Thomson Reuters.
Home Inns shares fell hard early before rebounding on heavy trading volume to end the day up 73 cents at 30.98.
Noting that China's economy went through a rough patch last year, Home Inns CEO David Sun told analysts on a conference call, "Moving into 2013, we are hopeful that the economy will improve and we are equally aware that meaningful improvements (in China's economy) may still be a few months away."
Sun noted that the company exceeded its new openings target in 2012, adding 366 new hotels. "We expect to maintain a similar level of new hotels opening and open 360 to 380 new hotels in 2013," he said.
Home Inns competes with other regional Chinese hotels chains that serve the growing middle class in the world's second-largest economy.
Top-rated of these is Seven Days (SVN), which operates more than 900 hotels. Its stock has an 89 IBD Composite Rating, meaning it's recently outperformed 89% of all stocks on key metrics such as sales and profit growth. Seven Days shares edged down 0.3% Tuesday.
Among other Chinese regional chains China Lodging Group (HTHT), with more than 600 properties and a 77 Composite Rating, slid 0.4%.
The top-performing companies in the group are large, global chains. Top-rated among these are Wyndham Worldwide (WYN), with a 91 Composite Rating, and Intercontinental Hotels (IHG), a U.K.-based company with more than 4,400 properties in about 100 countries. Wyndham dropped 0.8% Tuesday and IHG climbed 1%.
Home Inns posted a 14-cent-a-share profit for the fourth quarter, up from a 12-cent loss a year earlier, but still 2 cents below Wall Street projections. Revenue rose 13% to $220.8 million, a tad under estimates of $221.9 million.
This quarter, however, the regional hotel chain forecast revenue of $222.3 million to $227.1 million, higher than the $212.8 million consensus estimate of 11 analysts polled by Thomson Reuters.
Home Inns shares fell hard early before rebounding on heavy trading volume to end the day up 73 cents at 30.98.
Noting that China's economy went through a rough patch last year, Home Inns CEO David Sun told analysts on a conference call, "Moving into 2013, we are hopeful that the economy will improve and we are equally aware that meaningful improvements (in China's economy) may still be a few months away."
Sun noted that the company exceeded its new openings target in 2012, adding 366 new hotels. "We expect to maintain a similar level of new hotels opening and open 360 to 380 new hotels in 2013," he said.
Home Inns competes with other regional Chinese hotels chains that serve the growing middle class in the world's second-largest economy.
Top-rated of these is Seven Days (SVN), which operates more than 900 hotels. Its stock has an 89 IBD Composite Rating, meaning it's recently outperformed 89% of all stocks on key metrics such as sales and profit growth. Seven Days shares edged down 0.3% Tuesday.
Among other Chinese regional chains China Lodging Group (HTHT), with more than 600 properties and a 77 Composite Rating, slid 0.4%.
The top-performing companies in the group are large, global chains. Top-rated among these are Wyndham Worldwide (WYN), with a 91 Composite Rating, and Intercontinental Hotels (IHG), a U.K.-based company with more than 4,400 properties in about 100 countries. Wyndham dropped 0.8% Tuesday and IHG climbed 1%.
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