Hersha Hospitality Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Hersha Hospitality (NYSE: HT  ) popped 12% in intraday trading today after receiving a warm investor welcome to an inline earnings report and reiteration of 2011 guidance.

So what: EPS of $0.04 doubled year over year and met the consensus estimate. Revenue of $90.5 million was 2% stronger than the consensus estimate of $88.4 million and grew 20% year over year.

Now what: With signs the economy and consumer spending could weaken in the back half, reiterating guidance for the year is a positive signal. What's more, although the company hasn’t had a profitable year since 2007, guidance suggests it is on the right track. For 2011, management reiterated guidance of revenue per available room growth of 6%-8%, same-store RevPAR growth of 5%-7%, Hotel EBITDA margin expansion of 100 basis points to 150 basis points, same-store Hotel EBITDA margin expansion of 75 basis points to 125 basis points, and a reduction in the run rate of SG&A expenses to between $9.25 million and $9.75 million versus $10.2 million in 2010.

Interested in more info on Hersha? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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