Starwood Hotels Quarterly Profit Falls as Europe SlowsChris Spillane and Nadja Brandt
Starwood Hotels & Resorts Worldwide Inc., owner of the luxury St. Regis and W brands, said fourth-quarter earnings declined as revenue growth slowed in Europe and costs rose.
Net income dropped to $142 million, or 72 cents a share, from $167 million, or 85 cents, a year earlier, the Stamford, Connecticut-based company said today in a statement. Analysts expected a profit of 65 cents a share, the average of 15 estimates in a Bloomberg survey.
“The year looks to be somewhat stronger than 2012, as the uncertainty we saw in major world economies is showing signs of giving way to strong demand growth,” Starwood Chief Executive Officer Frits van Paasschen said in the statement. “We are bullish about the long-term outlook on the global high-end lodging industry.”
Starwood had predicted earnings for the period of 64 cents to 66 cents a share. Analysts gave an estimate of 68 cents at the time.
Fourth-quarter revenue was little changed at $1.53 billion, the company said in the statement. Worldwide revenue per available room, a measure of occupancy and rates, rose 4.1 percent from a year earlier, excluding currency fluctuations and acquisitions. Revpar rose 5.2 percent in North America, 1 percent in Europe and 3.9 percent in Asia.
“Muted international revpar growth in local currency” weighed on Starwood’s earnings, Nikhil Bhalla, a senior lodging analyst at FBR & Co. in Arlington, Virginia, said in an e-mail before the report was released. “I expect little improvement given continued economic softness in Europe and oversupply of hotel rooms in China and India.”
Shares of Starwood fell 1.4 percent to $61.72 at the close in New York.
Marriott International Inc., the largest publicly traded U.S. hotel chain, is scheduled to report fourth-quarter earnings on Feb. 19. Hyatt Hotels Corp., the chain controlled by the Pritzker family, will release results on Feb. 13.