* First-quarter EPS forecast $0.51-$0.54 vs est $0.48
* Adjusted EPS $0.70 vs est $0.65
* Sees 2013 revPAR growing by 5 to 7 percent
Feb 7 (Reuters) - Starwood Hotels & Resorts Worldwide Inc , whose chains include Sheraton and Westin, raised the lower end of its full-year forecast for its per-room revenue on an anticipcated rise in demand, but its shares fell 3 percent on lackluster earnings.
Excluding one-time items, Starwood earned 70 cents per share in the fourth quarter from continuing operations, 5 cents above what analysts were expecting on average.
However, Starwood shares, which have gained about 16 percent in the last three months, were down 2 percent at $61.52 in mid-day trading on the New York Stock Exchange.
"The results were basically a low-quality earnings beat, and the 2013 outlook is pretty much in line with consensus. This is not spectacular by any means," FBR Capital Markets analyst Nikhil Bhalla said.
Encouraged by a pick up demand, Starwood raised the lower end of its 2013 forecast for revPAR, or revenue per available room - a key metric for the hotel industry. It now expects revPAR to grow 5 to 7 percent this year, compared with its initial estimate 4 to 7 percent.
Starwood, which focuses on upscale customers, is set to do well in the United States, its largest market, as a business-led recovery drives up hotel occupancy rates.
However, its less diverse rivals like Marriott International and Hyatt Hotels Corp are expected to benefit more from the U.S. recovery because of their larger exposure to the market.
Starwood has 40 pct of its EBITDA (earnings before interest, tax, depreciation and amortization) coming from the United States, while Marriott and Hyatt draw about 70 pct of their's from the United States, analyst Bhalla said.
Starwood, which also franchises the W, St. Regis and Le Meridien brands, runs its hotel and leisure business directly and through subsidiaries. The company's second largest geography is China, followed by Europe.
"We are poised to benefit from higher rates in North America and Europe, where demand is growing but supply is already short," Starwood Chief Executive Frits van Paasschen said in a statement.
He said demand is also improving in Asia, Latin America, Middle East and Africa.
Starwood forecast first-quarter earnings of 51 cents to 54 cents per share, topping analysts' expectations of 48 cents per share, according to Thomson Reuters I/B/E/S.
For the fourth quarter ended Dec. 31, net income from continuing operations fell to $65 million, or 33 cents per share, from $158 million, or 80 cents per share, a year earlier.