Starwood 1Q net income drops due to charge

[April 28, 2011]  NEW YORK (AP) -- Starwood Hotels & Resorts Worldwide Inc.'s first-quarter net income fell 7 percent, pinched by a charge related to a Japanese hotel investment.

But the hotel operator's adjusted results surpassed Wall Street expectations as luxury travel continued to gain momentum. The company, based in White Plains, N.Y., lifted its full-year earnings forecast.

Starwood, whose brands including Sheraton, Westin and others, reported net income of $28 million, or 14 cents per share, for the period ended March 31. That's down from $30 million, or 16 cents per share, a year earlier.

Removing a charge tied to a minority investment in a Tokyo hotel, earnings from continuing operations were 30 cents per share.

Analysts polled by FactSet predicted earnings of 25 cents per share.

"We were able to exceed expectations despite turmoil in North Africa and the Middle East and the devastating earthquake in Japan," CEO Frits van Paasschen said in a statement.

Revenue rose 9 percent to $1.3 billion, topping Wall Street's $1.28 billion forecast.

Worldwide systemwide revenue per available room for hotels open at least a year climbed 10.4 percent. The metric was up 11.1 percent for hotels in North America.

Worldwide revenue per available room for Starwood branded hotels open at least a year increased 11.9 percent. For those in North America, the figure climbed 9.6 percent.

Revenue per available room, or revpar, is a key gauge of a hotel operator's health.

Starwood posted better results in all regions except Africa and the Middle East. For its brands, luxury properties, like the St. Regis/Luxury Collection and W Hotels, posted some of the strongest revpar gains. The company's boutique Aloft hotels reported the biggest increase, 24.9 percent.

The luxury performance has improved faster than others as wealthy travelers did not seem to be as hurt by the recession as middle- to low-income people.

Van Paasschen said group and short-stay bookings are still healthy, with the company "cautiously confident" about the year.

Starwood now anticipates full-year earnings in a range of $1.60 to $1.70 per share. It previously expected $1.55 to $1.65 per share.

For the second quarter, the company predicts earnings between 42 cents and 46 cents per share.

Analysts expected full-year earnings of $1.68 per share and second-quarter earnings of 45 cents per share.

"The outlook for the rest of the year looks promising as we view the events of the past few months as not having derailed the overall global economic recovery," van Paasschen said.

[Associated Press; By MICHELLE CHAPMAN]

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