Starwood Hotels & Resorts Worldwide Inc., owner of the luxury St. Regis and W brands, said first-quarter earnings rose 66 percent because of a tax benefit and growth in North America.
Net income climbed to $213 million, or $1.09 a share, from $128 million, or 65 cents, a year earlier, the Stamford, Connecticut-based company said today in a statement. That compares with a 53-cent average estimate of 15 analysts, according to data compiled by Bloomberg.
The earnings were lifted by a $70 million tax benefit, Starwood said. The company said a “tight supply” of hotel rooms in North America is driving up room rates, contributing to a 6.2 percent increase in the region’s revenue per available room, a measure of occupancies and rates.
“We had a strong start to the year,” Chief Financial Officer Vasant Prabhu said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “The global economy accelerated in the first quarter. But the best news of all was the U.S. The U.S. was our engine of our first quarter performance.”
Revpar increases in North America outperformed a 5 percent gain worldwide in constant dollars during the quarter.
Starwood shares rose 3.3 percent to $64.52 today in New York. They’ve gained 12 percent this year, compared with a 6.2 percent increase in the seven-member Standard & Poor’s Supercomposite Hotels Index.
Starwood’s first-quarter revenue dropped 10 percent to $1.54 billion. Results from last year’s first quarter were buoyed by sales of vacation units at its St. Regis Bal Harbour Resort in Miami Beach, Florida, which opened in January 2012.
The company raised its forecast for full-year adjusted earnings to $2.75 to $2.83 a share, compared with a February estimate of $2.59 to $2.68. Starwood projected worldwide revpar at its operated hotels will increase 5 percent to 7 percent in the second quarter and this year, with 4 percent to 6 percent growth at its owned hotels.