Extended Stay America, Inc. (STAY) operates hotels in the United States and Canada. The company operates under the Extended Stay America brand; Extended Stay Canada brand; Crossland Economy Studios brand; and the Hometown Inn brand.

The transformational initiatives undertaken by Extended Stay have been boosting RevPAR at its properties. These initiatives include better service, improving margins through operational efficiency, increasing brand awareness through targeted marketing efforts and upgrading properties to optimize returns. However, renovation of the company’s properties has hurt occupancy rate due to displacement.

Investors should also note the recent earnings estimate revisions for STAY, as the consensus estimate has been a mixed bag. Moreover, STAY’s earnings have been comparatively weak over the past few quarters. Extended Stay America has delivered negative earnings in all three of the trailing four quarters making for an average negative earnings surprise of 6.75%. Meanwhile revenues have posted negative revenue surprises in one of the trailing four quarters while remaining positive in the other three.

Currently, STAY has a Zacks Rank #3 (Hold) but that could change following Extended Stay’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: STAY beat on earnings. Our consensus earnings estimate called for earnings of 14 cents per share and the company reported EPS of 15 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: STAY reported revenues of $287.6 million. This marginally beat our consensus estimate of $287.0 million.

Key Stats to Note:  Revenue per available room (RevPAR) improved 6.8% year over year, driven by an improvement in average daily rate (ADR) of 6.3% and 40 basis points increase in occupancy. Hotel operating margin improved 190 basis points year over year to 50.1%.

The company expects total revenues to increase 5% to 7% to $1.275 billion to $1.3 billion in 2015.

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