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NEW YORK — Shares of LaSalle Hotel Properties rose Thursday as the hotel real estate investment trust's second-quarter funds from operations easily beat Wall Street's expectations.
Late Wednesday the Bethesda, Md.-based company reported FFO of 70 cents per share, for the period ended June 30. While that's down from $1.18 per share a year earlier, the performance topped the 58-cents-per-share estimate of analysts polled by Thomson Reuters.
Funds from operations, or FFO, adds such items as amortization and depreciation to net income, and is considered a key measure of strength for REITs because it provides a more accurate picture of cash performance.
Janney's Daniel Donlan said in a client note that the company's hotel earnings before interest, taxes, depreciation and amortization margins held fairly steady on a nearly 16 percent drop in expenses.
The analyst also said that demand for upper-upscale hotel rooms may be stabilizing, as LaSalle has experienced smaller declines in monthly revenue per available room for that segment from April through June.
Revenue per available room, known as revpar, is a key gauge of a lodging operator's performance.
Donlan reiterated a "Buy" rating.
LaSalle's stock added $1.20, or 9.5 percent, to $13.88 in afternoon trading. The shares have traded in a 52-week range of $3.57 to $33.
