San Clemente-based hotel owner Sunstone Hotel Investors Inc. reported a fourth-quarter profit slightly ahead of Wall Street’s expectation while revenue came in just shy.
Sunstone’s funds from operations, a measure of profitability for hotel and other real estate owners, came in at $16.2 million, down 57% from a year earlier but just ahead of the $15.3 million analysts were expecting on average.
Revenue came in at $192.6 million, down 18% from a year earlier and just shy of the $194 million expected by Wall Street.
Sunstone’s revenue per available room, or sales from rooms available to guests during the quarter, fell 14% to $97.31.
The company owns all or part of 29 hotels after handing back 11 in the past year or so to lenders. The company excludes those hotels from its numbers, including eight that are in the process of being turned over to receivers.
Even as Sunstone sheds hotels that are underperforming or worth less than their mortgages, the company is seeking to buy others.
Sunstone said it “continues to analyze a variety of investment opportunities aimed at enhancing its portfolio quality and growth prospects.”
But acquisitions could take a while. The company said it doesn’t see “optimal conditions” for buying until later this year or in 2011 as other indebted hotels could default on mortgages and go up for sale.
