Starwood net narrows, but beats Street expectations
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Starwood Hotels & Resorts Worldwide Inc., which manages or owns more than a dozen properties in Hawaii, said second-quarter profit fell less than analysts estimated and increased its 2007 forecast after raising room rates in the United States and Europe.
This year's earnings may be $2.78 a share, up from the $2.57 predicted in April, the company said yesterday. Net income for the three months ended in June fell 79 percent to $145 million, or 67 cents, from a year earlier when the sale of hotels boosted results. Analysts were looking for 63 cents.
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By Oliver Staley / Bloomberg News
LAS VEGAS » Starwood Hotels & Resorts Worldwide Inc., which manages or owns more than a dozen properties in Hawaii, said second-quarter profit fell less than analysts estimated and increased its 2007 forecast after raising room rates in the United States and Europe.
This year's earnings may be $2.78 a share, up from the $2.57 predicted in April, the company said yesterday. Net income for the three months ended in June fell 79 percent to $145 million, or 67 cents, from a year earlier when the sale of hotels boosted results. Analysts were looking for 63 cents.
Profit a year earlier was $680 million, or $3.01 a share, following Starwood's sale of 33 hotels to Host Hotels & Resorts Inc.
Starwood, which is selling hotels to focus on managing properties, increased rates as executives and tourists sought rooms in large U.S. cities such as New York and Los Angeles where few hotels are being built. The company, the third-largest hotel company, owns luxury chains such as W and Le Meridien. It also has benefited from its large number of properties overseas.
"When I think of Starwood, I think of a huge New York presence, which should be doing very, very well, and huge international presence," said William Crow, an analyst with Raymond James & Associates in St. Petersburg, Fla.
Revenue rose 4.5 percent to $1.57 billion, the White Plains, N.Y.-based company said. Revenue per available room, a measure of rates and occupancy known as revpar, rose 5 percent for North American properties and 8.4 percent worldwide.
Excluding some items, profit was 82 cents from continuing operations, Starwood said.
Along with competitors including Marriott International Inc., Starwood is experiencing slower growth than it expected in the U.S.
Starwood lowered the high end of its range for estimated revpar growth from as much as 9 percent to as much as 8 percent for North American hotels it owns. These include the St. Regis and the Sheraton Manhattan in New York. The low end of the range remains 7 percent.
Starwood said in June that it planned to open more than 80 hotels, an increase from 56 last year, and anticipated signing 200 new contracts with developers in 2007 as it adds brands and expands in fast-growing regions such as India and China.
Starwood owns, manages or franchises about 870 hotels in more than 100 countries under brands such as Sheraton, St. Regis and Westin.