Earnings Preview: Starwood Hotels & Resorts Worldwide

Starwood Hotels & Resorts Worldwide (HOT) is expected to report Q2 earnings before market open Thursday, July 24, with a conference call scheduled for 10:30 am ET.

Guidance

Analysts are looking for a profit of 52c on revenue of $1.5B. The consensus range is 48c to 58c for EPS, and revenue of $1.41B to $1.59B, according to First Call. In April, the company forecast Q2 EPS 50c to 54c and FY08 EPS $2.40 to $2.58 vs. First Call consensus of $2.45.

Analyst Views

In a July 17 note to clients, Wachovia upgraded Starwood Hotels to Outperform from Market Perform. The firm believes the shares have priced in the majority of the risk to estimates and that Starwood's high international exposure should provide a buffer against deteriorating U.S. fundamentals. Additionally, the firm believes that Starwood's capital structure and dividend are secure.

However, shares have recently been downgraded at Goldman to Sell from Neutral. Goldman, which added Starwood to its Conviction Sell List, said that the downgrade is "both a function of broader consumer concerns as well as industry and company-specific issues." The firm expects fundamentals to begin deteriorating in both the higher-end segments of the lodging industry as well as international markets.