(Reuters)
Starwood Hotels and Resorts (NYSE:HOT) swung to a profit in the third quarter and shattered Wall Street expectations, as revenue per available room continued to grow globally and fees were pushed higher.
The White Plains, N.Y.-based operator of the Regis, W, Sheraton and Westin hotels said it earned $163 million, or 84 cents a share during the period, compared with a year-ago loss of $6 million, or 3 cents a share.
Excluding special restructuring and tax items, Starwood earned 60 cents a share, which is sharply higher than the 39 cents a share predicted on average by analysts in a Thomson Reuters poll.
Revenue for the three-month period was $1.37 billion, up 9.3% from $1.25 billion a year ago, beating the Street’s view of $1.36 billion.
The earnings were led by an 11.6% increase in worldwide revenue per available rooms at same-store hotels. Revenue per available room climbed 8.8% in North America.
While gross operating profit was impacted by turmoil in the Middle East and North Africa and the impacts of the March earthquake in Japan, the company’s same-store operating margin climbed during the period from the same time in 2010.
Starwood’s chief executive, Frits van Paasschen, said he was pleased the company’s “continued footprint growth,” attributing the gains to a 17% increase in managed and franchised fees.
“We expect to continue growing faster than the market, both in terms of REVPAR and footprint, thanks to our brand momentum and exposure to rapidly growing markets,” he said.
The company warned that it is “still too early to have a clear view” of 2012 because of the “many clouds over the global economy.”
However, Starwood said it is cautiously confident as occupancies in developed markets have reached pre-recession levels and there continues to be unmet demand for hotels in emerging markets.
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