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Source: Hyatt

Hyatt Hotels (NYSE:H) reported earnings for the third quarter of 2014 on Wednesday October 20, 2014 before the market open. Both earnings and sales came in below expectations, but we Foolish investors know that you need to dig below the headlines to make a smart assessment about a business when analyzing financial reports. Let's take a look at Hyatt's recent earnings release and try to find out what the future may bring for investors in Hyatt stock.

The headline numbers
Total revenues during the quarter ended in September came in at $1.1 billion, a 7.6% increase versus $1.03 billion in total revenues during the same quarter in 2013, and marginally below the $1.12 billion in revenues expected on average by Wall Street analysts according to data compiled by Thomson Reuters.

Adjusted EBITDA during the quarter was $179 million, representing a healthy increase of 12.6% versus $159 million in adjusted EBITDA during the same quarter last year.

However, when including variables such as the accounting impact from operations in unconsolidated ventures and gains on sales of real estate, reported EBITDA came in at $170 million, a decline versus $190 million in reported EBITDA during the year ago quarter.

Net income attributable to Hyatt declined to $32 million from $55 million, while earnings per share came in at $0.21 per share versus $0.35 per share in the same quarter last year.

Adjusted for special items, net income attributable to Hyatt was $30 million, or $0.20 per share, versus $0.23 per share during the third quarter in 2013. The figure was below forecasts of $0.26 in adjusted earnings per share during the quarter.

Key metrics
Revenue per available room -- RevPAR -- is an important metric in the hotel industry, the figure is calculated as the product of the average daily rate and the average daily occupancy percentage. RevPAR is widely used to identify trends and analyze information regarding room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis.

Comparable systemwide RevPAR increased by a big 7.6% during the quarter, while the increase was an even higher 8% when excluding the effect of currency fluctuations. RevPAR for comparable owned and leased hotels improved 7.6% during the quarter, or 7.3% when excluding the effect of currency volatility.

The average daily rate for comparable owned and leased hotels rose 5.8% to $193.70, while occupancy increased to 79.9% from 78.6%. Operating margin in owned and leased hotels grew to 24% from 23.4%.

The future
Hyatt does not provide formal earnings guidance, but CEO Mark S. Hoplamazian sounds quite optimistic regarding industry fundamentals and the performance of the business over the coming years.

Looking ahead, group pace for 2015 is up approximately 8% providing further opportunity to grow rates and improve margins through higher rooms and food and beverage revenues. Combined with strong demand and limited new supply in many U.S. markets, the multiple earnings tools in our business model position us well for future years.

Hyatt opened 11 hotels during the quarter, bringing the total base to nearly 250 hotels, or approximately 55,000 rooms. Management believes the company is on track to opening a total of 40 new hotels this year.

The company is also recycling its asset base, which means selling properties and continuing to manage them under long-term contracts, this is a smart strategy to strengthen the balance sheet and operate in a capital efficient manner. Hyatt has recently received more than $350 million from the sale of Hyatt Residential Group, Park Hyatt Washington and three joint venture hotels, and it expects to close on the sale of 38 select service hotels for approximately $590 million next month. The company has seven full service hotels and six select service hotels listed for sale.

The takeaway
While sales and earnings came in below analysts' forecasts, it's important to note that Hyatt does not provide guidance to Wall Street, which makes it much harder for analysts to make accurate predictions. Hyatt is receiving more guests and making more money per room, and management is quite optimistic regarding the future. Investors in Hyatt stock should make themselves comfortable and enjoy their stay.

Andrés Cardenal has no position in any stocks mentioned. The Motley Fool recommends Hyatt Hotels. Try any of our Foolish newsletter services free for 30 days. 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.