Starwood Hotels moves to 3Q loss
Thursday, October 28, 2010
NEW YORK (AP) — Starwood Hotels & Resorts Worldwide Inc. lost money in its third quarter, dragged down by a hefty charge tied to a hotel sale. Adjusted results topped Wall Street’s expectations as occupancy improved.
The owner of Sheraton, Westin and other brands also raised its 2010 earnings outlook Thursday.
Starwood reported a net loss of $6 million, or 3 cents per share, compared with net income of $40 million, or 22 cents per share, a year ago.
Excluding a charge of $52 million, or 28 cents per share, mostly related to a loss on a hotel sale, adjusted earnings were 25 cents per share. Analysts surveyed by Thomson Reuters, whose estimates typically take out one-time items, expected 22 cents.
Revenue for the period ended Sept. 30 climbed 9 percent to $1.26 billion. Wall Street expected $1.27 billion.
Starwood said its worldwide systemwide revenue per available room rose 10 percent in the quarter at hotels open at least a year. This figure is considered a key gauge of a hotel operator’s health.
In North America, that figure climbed 10.6 percent.
“Our distinctive and compelling brands are gaining share, and our strong presence in the key global cities positions us well to benefit from the return of the business traveler,” CEO Frits van Paasschen said in a statement.
The hotel sector struggled during the recession as both leisure and business travelers postponed or canceled trips to save money. But the travel industry is starting to see an uptick in business but has slowed construction of new hotels.
Van Paasschen said Starwood anticipates overall additions of new hotel rooms in developed markets to stay “well below historic rates of growth.” Supply growth in its upper upscale and luxury segments for North America is expected to drop below 0.5 percent next year, with van Paasschen saying that it will likely “remain at these low levels for a few years to come.”
Starwood now expects 2010 earnings before one-time items to be between about $1.09 and $1.11 per share. Its prior guidance was for between 93 cents and $1.05 per share. Analysts are looking for $1.08 per share for the year.
The company, based in White Plains, N.Y., predicts fourth-quarter net income of about 36 cents to 38 cents per share, before special items. For 2011, Starwood forecasts earnings before special items between about $1.44 and $1.55 per share.
Analysts expect fourth-quarter net income of 38 cents per share and 2011 earnings of $1.49 per share.
Starwood owns or manages 1,025 properties in nearly 100 countries. Its other brands include Le Meridien and St. Regis.