Starwood Posts Lower Profit, Cuts Outlook

(RTTNews) - Starwood Hotels & Resorts Worldwide, Inc. (HOT) said Thursday that its second quarter profit fell 11% from last year, hurt by lower revenue as well as restructuring and special charges.

However, the company's quarterly earnings per share, excluding items, came in above analysst' expectations as did its quarterly revenue.

At the same time, the company forecast third quarter earnings below analysts' current consensus estimate and lowered its full year earnings outlook.

Adam Aron, Starwood's interim Chief Executive Officer, said, "Starwood delivered strong Adjusted EBITDA and EPS before special items in the second quarter of 2015, even in the face of macroeconomic headwinds. We improved our performance while streamlining our organization and reducing our costs."

Starwood shars are currently trading at $80.76, down $1.89 or 2.29%. The shares trade in a 52-week range of $68.53 to $87.99.

Starwood owns, operates, and franchises luxury and upscale full-service hotels, resorts, residences, retreats, select-service hotels, and extended stay hotels under the St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Four Points, Aloft, and Element brand names. As of June 30, it operated about 1,200 properties in 100 countries.

For the second quarter ended June 30, 2015, the Stamford, Connecticut-based company reported net income of $136 million or $0.79 per share, compared to $153 million or $0.80 per share for the year-ago quarter.

Excluding items, adjusted earnings for the second quarter were $0.84 per share, compared to $0.77 per share in the prior year quarter.

On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.74 per share for the second quarter. Analysts estimates typically exclude special items.

Revenue for the second quarter fell 3.8% to $1.48 billion from $1.54 billion in the same quarter last year. Sixteen analysts had a consensus revenue estimate of $1.47 billion for the second quarter.

Worldwide Systemwide Revenue Per Average Room for Same-Store Hotels increased 4.1% in constant dollars, but decreased 0.7% in actual dollars.

Looking forward, the company forecasts third quarter earnings of $0.69 to $0.73 per share.

For the full year 2015, the company now forecasts adjusted earnings of $2.93 to $3.03 per share, compard to its prior guidance of $2.94 to $3.04 per share.

Analysts currently expect the company to earn $0.74 per share for the third quarter and $2.99 per share for the full year 2015.

Starwood said in late April that it would explore strategic and financial alternatives to increase shareholder value. The company did not provide any update on that in its latest quarterly report.

However, reports said Thursday that Starwood has reached out to potential bidders including InterContinental Hotels Group Plc and Wyndham Worldwide Corp.