Earnings Preview: Starwood Hotels & Resorts Worldwide

Oct.21.09 | About: Starwood Hotels (HOT)

Starwood Hotels & Resorts Worldwide (NYSE:HOT) is expected to report Q3 earnings before the market open on Thursday, October 22 with a conference call scheduled for 10:30 am ET.

Guidance

Analysts are looking for a profit of 10c on revenue of $1.16B. The consensus range is 4c-15c for EPS, and revenue of $1.05B-$1.27B, according to First Call. When it reported Q2 results the company stated it expected Q3 EPS of 6c-10c and FY09 EPS of 65c vs. a consensus of 67c. The company also stated it expects Q3 management and franchise revenues will be down approximately 16%-18%, adjusted EBITDA to be $165M-$175M, and REVPAR decline at Same-Store Company Operated Hotels Worldwide of 20%-22%. Starwood Hotels felt there was a lot of uncertainty on how the economy will unfold, but vowed to stay in compliance with covenants even if 2010 is like 2009.

Analyst Views

In late September, Wells Fargo downgraded the company to Underperform from Market Perform. The firm based the downgrade on on valuation and its belief that RevPAR typically lags at large hotel chains during a recovery.