The company said it now projects its full-year earnings, not counting special gains and charges, to be $2.63 a share, compared with the $2.78-a-share estimate it released in August. The earnings report, which was released before the stock market opened, sent the value of the company's shares down $1.97 to $55.61.
The drop in third-quarter profit came despite a 5.4 percent increase in sales, which totaled $1.54 billion and was driven by high demand for hotel rooms, said Starwood, which runs Sheraton, W, Westin and St. Regis hotels.
During the third quarter of 2006, White Plains-based Starwood earned $155 million, or 71 cents on a per-share basis. Not counting special items, the company would have earned 68 cents a share from continuing operations in both quarters.
Analysts surveyed by Thomson Financial predicted earnings of 65 cents a share.
This year's results included special charges of 7 cents a share, mainly to losses on asset impairments. Last year, the company recorded a gain of 3 cents a share from the tax benefits.
The company's hotel business is faring much better than its vacation-ownership business. On the hotel side, revenue per available room - which takes into account rates and occupancy - rose 9.5 percent.
But revenues from the vacation-ownership business increased only 1.2 percent to $252 million, the company said. Construction delays held down sales, the company said.
Starwood expects its vacation ownership business to decline next year.
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1 comment:
This is a good article but what is the share of this revenue earnings from its much touted 'SPG (Starwood Preffered Guest)' - a much touted Frequent Guest Program. Is there any study that reveals such a thing i.e. Revenue impact of Loyalty Programs for hotels.
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