Hersha Hospitality Trust (HT) has reported 47.34 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $6.51 million, or $0.03 a share in the quarter, compared with $12.36 million, or $0.19 a share for the same period last year.    

Revenue during the quarter dropped 9.49 percent to $111.44 million from $123.13 million in the previous year period.

Cost of revenue dropped 4.08 percent or $3.07 million during the quarter to $72.30 million. Gross margin for the quarter contracted 366 basis points over the previous year period to 35.12 percent.

Total expenses were $99.38 million for the quarter, down 2.48 percent or $2.53 million from year-ago period. Operating margin for the quarter contracted 641 basis points over the previous year period to 10.83 percent.

Operating income for the quarter was $12.07 million, compared with $21.23 million in the previous year period. However, the adjusted EBITDA for the quarter stood at $39.44 million compared with $45.93 million in the prior year period. At the same time, adjusted EBITDA margin contracted 191 basis points in the quarter to 35.39 percent from 37.30 percent in the last year period.

For fiscal year 2017, Hersha Hospitality Trust expects net income to be in the range of $67 million to $77 million, the company forecasts diluted earnings per share to be in the range of $1.59 to $1.82.

Other income during the quarter was $0.07 million, up 109.38 percent or $0.04 million from year-ago period.

Mr. Jay H. Shah, Hersha's chief executive officer, stated, "2016 was a transformational year for Hersha as we executed several creative and unique entrepreneurial initiatives to unlock value, drive results, and continue our growth trajectory in our core markets, while further diversifying our income stream. During 2016, we entered into agreements to sell 16 hotels for $832.8 million and closed on 11 of these hotels for $640.3 million, highlighted by our 7-hotel, $571.4 million joint-venture transaction with Cindat, which materially reduced our exposure to the challenged Manhattan market. We utilized proceeds from our joint-venture sale and other suburban dispositions, while deferring over $186.0 million of tax gains, to acquire 5 high-quality, well-located hotels for $380.9 million, meaningfully increasing our exposure to the higher growth Washington, DC, Boston and California markets. The net result of our capital recycling activities is a young, differentiated, geographically focused, transient hotel portfolio in-tune with travelers’ tastes and preferences. We also executed several large capital raising transactions to optimize our balance sheet in 2016, expanding the Company’s unsecured borrowing capacity to $1.0 billion. In addition, we successfully accessed the best preferred market in years to raise $292.5 million of 6.5% Preferred Equity, which provided additional financial flexibility to execute our business plan. Finally, and in-line with the Company’s value creation philosophy and commitment to total shareholder returns, we repurchased $52.0 million of our common shares in 2016, representing approximately 6.2% of the float."

Net receivables were at $27.10 million as on Dec. 31, 2016, up 72.53 percent or $11.39 million from year-ago. 

Real estate investments stood at $11.44 million as on Dec. 31, 2016, up 10.91 percent or $1.12 million from year-ago.   

Total assets grew 9.43 percent or $185.76 million to $2,155.54 million on Dec. 31, 2016. On the other hand, total liabilities were at $1,275.80 million as on Dec. 31, 2016, up 1.12 percent or $14.18 million from year-ago.

Return on assets moved down 41 basis points to 0.79 percent in the quarter. At the same time, return on equity moved down 111 basis points to 0.13 percent in the quarter.