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Starwood Serves Up Luxurious Profit, Lifts Guidance - Update


Starwood Hotels & Resorts Worldwide Inc. (HOT) on Thursday reported substantial growth in first-quarter profit that breezed past analysts' estimates, helped by higher revenues stemming from the St. Regis Bal Harbour Resort residential project. The giant hotel operator also lifted its full-year earnings forecast.

The owner the Sheraton, St.Regis and W brands said net income attributable to common stockholders quadrupled to $128 million or $0.65 per share in the first quarter from $28 million or $0.14 per share last year.

Excluding one-time items, earnings from continuing operations were $0.63 per share and include income from Miami Beach's St. Regis Bal Harbour Resort residential project. This compares to $0.30 per share in the first quarter of 2011.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues surged to $1.72 billion from $1.30 billion, beating analysts' consensus of $1.54 billion for the quarter. The company realized residential revenues of $356 million from Bal Harbour.

Revenues from vacation ownership and residential sales and services climbed to $514 million from $153 million. Vacation ownership revenues grew 3.4 percent to $152 million.

Originated contract sales of vacation ownership intervals increased 1.2 percent primarily due to increased tour flow from new buyers and improved sales and marketing performance.

Worldwide system-wide revenue per available room or RevPAR for same-store hotels grew 5.8 percent from last year. International system-wide RevPAR for same-store hotels rose 4.1 percent.

Looking ahead, for the second quarter, including Bal Harbour, earnings per share are expected to be in the range of $0.58 to $0.62. Analysts expect the company to report earnings of $0.60 per share for the second-quarter.

For full year 2012, including Bal Harbour, earnings per share before special items is expected to be between $2.35 and $2.46. Previously, the company had expected earnings per share to be about $2.22 to $2.33, inclusive of Bal Harbour. Wall Street expects earnings of $2.31 per share for 2012.

The company now expects REVPAR increases at same-store company-operated hotels of 6 to 8 percent in constant dollars.

CEO Frits van Paasschen said, "Going into the year, we said that 2012 was more likely to surprise on the upside. So far, that is playing out. More importantly, we remain very bullish on the long-term."

"Seemingly unstoppable demographic and economic trends are fueling global growth in demand for high end travel. Rising wealth around the world and globally interconnected businesses will lead to ever more travel," Paasschen added.

HOT shares closed on Wednesday at $57.62, up from the prior close of $56.85, on a volume of 2.54 million shares. The stock is up 2.2 percent in pre-market.

by RTTNews Staff Writer

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