Hilton scrapes out profit in early phase of coronavirus

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Hilton Worldwide Holdings Inc. turned a profit in the first three months of the year, with the COVID-19 pandemic not significantly hurting its business until March.

The McLean, Virginia-based hotel operator's first-quarter profit fell 89 percent from a year ago to $18 million, or 6 cents per share. Adjusted earnings were 74 cents a share on revenue of $1.92 billion, outstripping estimates of 55 cents and $1.91 billion, respectively, from analysts surveyed by Refinitiv.

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“We are currently experiencing unprecedented times as a result of the COVID-19 pandemic, and our No. 1 priority remains protecting the safety and security of our guests, team members and owners,” CEO Christopher Nassetta said in a statement. “We have also taken precautionary measures to protect our business, including securing our liquidity position.”

The hotel operator had $1.81 billion cash at the end of the first quarter after borrowing the remaining $1.75 billion from its credit facility as a precautionary measure. Hilton took further action to bolster its balance sheet at the start of the second quarter, selling $1 billion of Hilton Honors points and raising $1 billion by issuing senior notes.

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Hilton said first-quarter occupancy fell by 14 percentage points to 56 percent. That was the main driver of revenue per available room plunging 23 percent from the year prior to $76.16.

The company suspended both its share repurchase program and quarterly dividend on March 26.

Shares fell 36 percent this year through Wednesday, worse than the S&P 500's 12 percent drop.