Earnings Preview: Starwood Hotels & Resorts Worldwide

Jul.22.09 | About: Marriott International, (MAR)

Starwood Hotels & Resorts Worldwide (HOT) is expected to report Q2 earnings before the market open on Thursday, July 23 with a conference call scheduled for 10:30 am ET.


Analysts are looking for a profit of 17c on revenue of $1.21B. The consensus range is 11c-21c for EPS, and revenue of $1.14B-$1.25B, according to First Call. In April Starwood guided Q2 EPS 14c-20c. During the quarter the company said it was planning a public offering of five-year senior notes and to use the proceeds to pay down debt. Additionally, the company announced plans to sell its W San Francisco hotel for $90M.

Analyst Views

On July 8 Baird reduced Hotel estimates "across the board", and cut Starwood to Underperform from Neutral based on expectations that RevPAR recovery will not occur until 2H10 versus prior expectations for a recovery in late 2009. FBR Capital Markets analyst Patrick Scholes believes RevPAR could fall over 30% in Q2 for luxury hotel operators as they derive a larger share of revenue from business travel. He believes Starwood will "acknowledge things are weak right now" but believes things are "slowly getting less worse." Analysts and investors will listen for management's comments on its outlook for 2H09 and into 2010. Additionally, they will listen for predictions for occupancy rates.