* EPS ex-items 51 cents; Street view 22 cents
* Says outlook for 2010 remains clouded
* Shares up 5 percent on NYSE
(Recasts; adds comment from conference call, details on
vacation ownership segment, background on hotel industry,
updates share price)
By Deepa Seetharaman
NEW YORK, Feb 4 Starwood Hotels & Resorts
HOT.N, operator of the W and Sheraton hotels, boosted its
2010 outlook on Thursday and expressed cautious optimism for
the coming year, sending shares as much as 8.6 percent higher.
The No. 8 hotel operator projected revenue per available
room (revPAR) would be flat to up 5 percent this year. It
previously projected revPAR, a measure of fiscal health among
hotels, would be flat to down 5 percent.
"Last year at this time, our group business was heading
downhill fast," said Chief Financial Officer Vasant Prabhu
during a conference call with analysts. "Now we have seen a few
Shares jumped 5 percent to $37.21 in late morning trade on
the New York Stock Exchange, while the broader S&P 500 .SPX
index slumped. It was among the biggest percentage gainers on
Starwood is the first U.S. hotel company to report this
quarterly earnings season. Hotels have been hammered in the
past year by fewer bookings, forcing them to cut room rates.
Starwood said it is likely to be reliant on "late-breaking"
corporate business travel this year, which will affect its
ability to forecast performance. Group business has picked up
with lead volume up 15 percent, but still lags 2009 levels.
RevPAR growth in 2010 will be driven by emerging markets,
Prabhu said. RevPAR in North America is expected to be flat to
down 3 percent.
"Starwood is definitely benefiting from its 40 percent
international exposure because we know the Asian markets and
European markets have been recovering faster than the U.S.,"
Collins Stewart analyst Bryan Maher said.
"One of the most important takeaways from this release is a
flat to up revPAR outlook," he added.
Next week, Marriott International MAR.N and Wyndham
Worldwide (WYN.N) post earnings. The Dow Jones U.S. Hotels
index .DJUSLG rose 1.7 percent.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graph on U.S. hotel sector stock performance, click
REVPAR BOOSTS Q4 RESULTS
For 2010, Starwood forecast a profit of 63 cents a share,
topping the average analyst estimate of 56 cents, according to
Thomson Reuters I/B/E/S.
Starwood forecast the first quarter would break even or see
a loss of 4 cents per share. Analysts expect the company to
RevPAR in the fourth quarter was stronger than Starwood had
projected. RevPAR for hotels the company operates worldwide
fell 6.8 percent, compared with Starwood's projection for a
slump of 9 percent to 11 percent.
Starwood has seen its corporate rate negotiations fare
better than expected. Prabhu told analysts that companies have
said their cuts in travel spending are behind them.
Starwood posted a fourth-quarter loss from continuing
operations of $186 million, or $1.03 per share, compared with a
loss of $45 million, or 25 cents per share, a year earlier.
Excluding timeshare-related and other charges, it posted a
profit of 51 cents per share, far above analysts' average
estimate of 22 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 1.2 percent to $1.28 billion, topping
analysts' average estimates of $1.17 billion.
Starwood was hit by a $362 million impairment charge after
it halted development of certain vacation ownership projects.
It was hurt by other charges related to severance and costs
linked to five owned hotels.
Revenues in this segment were flat compared with 2008 at
$134 million. The average price per vacation ownership unit
sold fell 7.1 percent.
(Reporting by Deepa Seetharaman; Editing by Maureen Bavdek,
John Wallace and Gunna Dickson)