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Italy's tax incentives boost hotelier's net
By White Plains |
July 24, 2009, Friday
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Print Edition
Print Edition
STARWOOD Hotels & Resorts Worldwide Inc said yesterday its second-quarter profit rose 28 percent as the lodging chain benefited from tax incentives in Italy.
The profit, which topped analyst expectations, came even as worldwide revenue per available room - a key hotel metric commonly called revpar - slid sharply as the recession hit business and leisure travel.
The parent of Sheraton and W Hotels earned US$134 million, or 74 US cents per share, during the three months that ended June 30. That's up from the previous year's US$105 million, or 56 US cents per share.
Excluding the Italian program and other items, earnings from continuing operations were 22 US cents per share.
Analysts surveyed by Thomson Reuters expected the company to post a profit of 17 US cents per share. Analysts' estimates normally exclude one-time items.
Worldwide revpar for same-store hotels slid 27.7 percent. In North America, revpar for same-store hotels slumped 25.4 percent.
The results were worse for hotels Starwood owns under its own brands, with same-store worldwide revpar down 35.5 percent and North American revpar off 34.4 percent.
Revenue dropped 23 percent to US$1.21 billion from US$1.57 billion, but still beat Wall Street's forecast of US$1.19 billion.
CEO Frits van Paasschen said a US$10 million drag from the swine flu did little to hurt its performance, as the hotel operator's cost controls and revenue results helped it top expectations. Starwood cut its selling, general, administrative and other expenses 30 percent during the quarter.
The profit, which topped analyst expectations, came even as worldwide revenue per available room - a key hotel metric commonly called revpar - slid sharply as the recession hit business and leisure travel.
The parent of Sheraton and W Hotels earned US$134 million, or 74 US cents per share, during the three months that ended June 30. That's up from the previous year's US$105 million, or 56 US cents per share.
Excluding the Italian program and other items, earnings from continuing operations were 22 US cents per share.
Analysts surveyed by Thomson Reuters expected the company to post a profit of 17 US cents per share. Analysts' estimates normally exclude one-time items.
Worldwide revpar for same-store hotels slid 27.7 percent. In North America, revpar for same-store hotels slumped 25.4 percent.
The results were worse for hotels Starwood owns under its own brands, with same-store worldwide revpar down 35.5 percent and North American revpar off 34.4 percent.
Revenue dropped 23 percent to US$1.21 billion from US$1.57 billion, but still beat Wall Street's forecast of US$1.19 billion.
CEO Frits van Paasschen said a US$10 million drag from the swine flu did little to hurt its performance, as the hotel operator's cost controls and revenue results helped it top expectations. Starwood cut its selling, general, administrative and other expenses 30 percent during the quarter.
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