Sunstone Hotel Investors Inc. said Monday that it posted a first-quarter net loss as revenue fell.
But the results were better than Wall Street expected, and shares climbed.
The real estate investment trust said its quarterly funds from operations available to common stockholders amounted to a loss of $1 million, or a penny per share. That compares with funds from operations of $31.3 million, or 60 cents per share during the same period last year.
Funds from operations, or FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for REITs because it provides a more accurate picture of cash performance
Excluding one-time items, adjusted FFO for the quarter was $3.9 million, or 4 cents per share.
Revenue slid 6.2 percent to $160.7 million from $171.4 million.
Analysts surveyed by Thomson Reuters forecast adjusted FFO of 3 cents per share on revenue of $139.3 million. Analyst estimates typically exclude one-time items.
Sunstone's quarterly net loss was $26.3 million, or 27 cents per share. That compares with net income of $876,000, or 8 cents per share, during the same period last year.
"During the first quarter we saw a reversal of the negative trends our industry experienced over the last year as demand rebounded," President and CEO Art Buser said in a statement.
Sunstone Hotel Investors owns about three dozen hotels with 12,900 rooms. Its shares rose 89 cents, or 7.8 percent, to $12.37 in afternoon trading. The stock has ranged from $4.15 to $13.47 over the past year.