UPDATE: Starwood Hotels Posts Better-Than-Expected Q3 Earnings, Issues Weak Q4 Forecast

Starwood Hotels & Resorts Worldwide

reported upbeat earnings for the third quarter. For the current quarter, the company projects earnings of $0.73 to $0.77 per share, versus analysts' estimates of $0.78 per share. The Stamford, Connecticut-based company posted quarterly earnings of $109 million, or $0.59 per share, compared to $157 million, or $0.81 per share, in the year-ago quarter. Excluding special items, its earnings from continuing operations slipped to $0.66 per share from $0.71 per share. Its revenue declined to $1.49 billion from $1.51 billion. However, analysts were expecting earnings of $0.65 per share on revenue of $1.52 billion. Revenue from sales of residential units shrank to $2 million versus $43 million. Worldwide Systemwide REVPAR for Same-Store Hotels climbed 7.4% in constant dollars, while management fees, franchise fees and other income climbed 3.2% to $255 million. Worldwide REVPAR for Starwood Same-Store Owned Hotels climbed 7.2% in constant dollars. Revenue from vacation ownership dropped 20.5% at $159 million in the quarter, while other revenue from managed and franchised properties rose 3.5% in the quarter. During the quarter, Starwood signed 39 hotel management and franchise contracts, representing approximately 7,100 rooms, and opened 18 hotels and resorts with around 3,500 rooms. Starwood paid a regular quarterly dividend of $0.35 per share and a special dividend of $0.65 per share during the quarter. The company also raised its share repurchase authorization by $1.1 billion. Frits van Paasschen, CEO, said, “Recent volatility in markets outside the U.S. along with a strengthening U.S. dollar are likely to be headwinds in the fourth quarter and into 2015. Despite these headwinds, we remain as bullish as ever about the long-term prospects of our business as rising global wealth, unprecedented growth in travel infrastructure, and a more interconnected business world continue to drive demand for high-end travel.” Starwood shares fell 0.67% to $80.50 in pre-market trading.