Starwood Reports Second Quarter 2008 Results
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Starwood Reports Second Quarter 2008 Results
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2008-07-24
Starwood Hotels & Resorts Worldwide, Inc. (NYSE:
HOT) today reported second quarter 2008 financial results.
Second Quarter 2008 Highlights
EPS from continuing operations was $0.56.
Income from continuing operations was $107 million.
Total Company Adjusted EBITDA was $299 million.
Worldwide System-wide REVPAR for Same-Store Hotels increased 9.6% compared
to the second quarter of 2007. System-wide REVPAR for Same-Store Hotels in
North America increased 3.0%.
Management and franchise revenues increased 11.6% compared to 2007.
Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased
6.8% compared to the second quarter of 2007. REVPAR for Starwood branded
Same-Store Owned Hotels in North America increased 5.2%.
Margins at Starwood branded Same-Store Owned Hotels Worldwide and in North
America decreased 84 and 58 basis points, respectively, compared to the second
quarter of 2007.
Reported revenues from vacation ownership and residential sales decreased 29.2%
compared to 2007.
The Company signed 37 hotel management and franchise contracts in the quarter
representing approximately 9,000 rooms.
During the second quarter, the Company repurchased approximately 3.8 million
shares at a cost of $182 million.
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Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported
EPS from continuing operations for the second quarter of 2008 of $0.56 compared to $0.67
in the second quarter of 2007. Excluding special items, which net to zero in 2008, EPS
from continuing operations was $0.56 for the second quarter of 2008 compared to $0.82 in
the second quarter of 2007. Excluding special items, the effective income tax rate in the
second quarter of 2008 was 28.3% compared to 24.1% in the same period of 2007
primarily due to the recognition of foreign tax credits in the second quarter of 2007, which
were generated in prior years.
Income from continuing operations was $107 million in the second quarter of 2008
compared to $145 million in 2007. Excluding special items, which net to zero in 2008 and
a $33 million charge in 2007, income from continuing operations was $107 million for the
second quarter of 2008 compared to $178 million in 2007. The decline in 2008 results was
primarily due to lower vacation ownership results and the inclusion, in 2007, of a $27
million gain from the sale of several hotels by a joint venture in which we held a minority
interest.
Net income was $105 million and EPS was $0.56 in the second quarter of 2008 compared
to $145 million and EPS of $0.67 in the second quarter of 2007.
Frits van Paasschen, CEO said, “Starwood’s global footprint and strong brands drove the
Company’s second quarter results above expectations and ahead of our competition.
While international lodging demand remains solid, the economic picture in the US has
continued to deteriorate, with lodging demand dropping significantly in May. We are
pleased with our second quarter performance, but are focused on managing costs to
minimize the impact of this slowdown. Despite the US economic picture, we remain bullish
on our long-term growth prospects. Today, our pipeline consists of more than 120,000
high quality rooms with almost 60% outside the US.”
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