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HOT Hochtief AG

98.85
0.40 (0.41%)
14 Jun 2024 - Closed
Realtime Data
Share Name Share Symbol Market Type
Hochtief AG TG:HOT Tradegate Ordinary Share
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.40 0.41% 98.85 98.25 99.40 99.50 98.40 99.20 3,292 22:50:02

Starwood 1Q Net Slumps 82% On Falling Revpar; 2Q View Weak

30/04/2009 11:57am

Dow Jones News


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   DOW JONES NEWSWIRES 
 

Starwood Hotels & Resorts Worldwide Inc.'s (HOT) first-quarter net income tumbled 82% on shrinking revenue per available room and a drop in timeshare sales.

While the quarter's profit topped downbeat expectations, the company projected second-quarter earnings of 14 cents to 20 cents. Analysts' mean estimate, as surveyed by Thomson Reuters, was 23 cents.

The weak economy has squeezed the hotel industry for some time, with timeshare businesses also under pressure. The outlook for 2009 is grim, despite efforts by hoteliers, including Starwood, to cut costs. A recent swine flu outbreak could raise cancellations and depress bookings.

The operator of hotels under the W Hotels, Westin, St. Regis and Sheraton brands reported net income of $6 million, or 3 cents a share, down from $32 million, or 17 cents a share, a year earlier. Excluding restructuring and other charges, earnings from continuing operations fell to 14 cents from 44 cents. Starwood in January forecast 2 cents to 7 cents, below analysts' estimates at the time.

Revenue decreased 24% to $1.12 billion. Analysts polled by Thomson Reuters most recently were looking for $1.14 billion.

Revenue per available room in hotels owned for at least a year fell 24%, including a bigger-than-expected 23% drop in North America.

Vacation-ownership revenue fell 30% as contracted timeshare sales dropped 50% on weaker demand. The average price per vacation-ownership unit fell 25% to about $18,000.

The downturn has hurt credit ratings for the lodging industry, with several hoteliers, including Starwood, falling into junk territory in recent months.

The company declined to provide an update to its 2009 earnings forecast, amid the significant uncertainty in the global economy. In January, Starwood cut its view to $1.10. Analysts anticipated a further reduction to 92 cents.

Shares closed at $20.70 on Wednesday and didn't trade premarket. The stock is down two-thirds the past year.

-By Tess Stynes and John Kell, Dow Jones Newswires; 201-938-2473; tess.stynes@dowjones.com

 
 

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