Starwood Hotels & Resorts Ups FY13 Forecast Again As Q3 Results Top View

(RTTNews) - Starwood Hotels & Resorts Worldwide, Inc. (HOT) reported Thursday a decline in the third-quarter profit reflecting lower one-time benefits and the absence of prior year's gain from discontinued operations, while revenues increased from last year. Adjusted earnings per share as well as top line beat analysts' estimates. The company lifted its fiscal 2013 earnings view once again.

Net income attributable to the company for the third quarter declined 7.6 percent to $157 million from last year's $170 million. Earnings per share fell 6.9 percent to $0.81 from $0.87 a year ago. Excluding prior year's gain of $23 million or $0.12 per share from discontinued operations, earnings grew 6.8 percent from last year, and earnings per share rose 8 percent.

The latest-quarter results included special items, comprising a benefit of $20 million primarily related to a favorable adjustment to a legal reserve, while prior year's results included special benefits of $33 million.

Adjusted income from continuing operations, which excluded special items, totaled $137 million or $0.71 per share, while last year's earnings were $114 million or $0.58 per share.

On average, 27 analysts polled by Thomson Reuters expected earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude one-time items.

Quarterly revenues totaled $1.51 billion, a 3.6 percent increase from last year's $1.46 billion, while twenty analysts estimated revenues of $1.49 billion for the quarter.

Worldwide system-wide revenue per available room or RevPAR for same-store hotels increased 4.2 percent with a 2.7 percent increase in international region and a 5.4 percent growth in North America.

The company's same-store company-operated gross operating profit margins increased approximately 50 basis points.

Further, the company said its Board of Directors has declared an annual cash dividend of $1.35 per share, payable on December 27 to stockholders of record on December 13. Also, the board would pay dividends to stockholders on a quarterly basis commencing in 2014 and plans to make four quarterly dividend payments in 2014.

Looking ahead to the fourth quarter, income from continuing operations, including Bal Harbour, is expected to be approximately $131 million to $134 million and earnings per share is expected to be around $0.68 - $0.70. Analysts anticipate fourth-quarter earnings of $0.70 per share.

For 2013, the company sees earnings per share before items, including Bal Harbour, to be approximately $2.93 - $2.95. Analysts project earnings per share of $2.87 for the year. Previously, the company projected earnings per share before items, including Bal Harbour, to be about $2.81 to $2.88. Earlier, the company had raised its full-year view along with its first quarter and second quarter results presentations.

In 2013, Starwood expects Bal Harbour to contribute nearly $117 million in earnings. Bal Harbour is expected to sell out in 2013 and, hence, Starwood said it expects no earnings from Bal Harbour in 2014.

Chief Executive Officer Frits van Paasschen added, "We remain bullish on the long-term trends of rising wealth and increasing demand for travel in fast growing economies, even in the face of slower growth in China, unrest in the Middle East, and economic challenges in Latin America."

In pre-market activity, Starwood shares are currently trading at $72.65, up $2.20 or 3.12 percent.