Starwood Hotels Reports Mixed Results in Third Quarter

03 November 2008 9:26pm

Starwood Hotels & Resorts Worldwide, Inc. reported third quarter 2008 financial results. Excluding special items, income from continuing operations was $129 million for the third quarter of 2008 compared to $143 million in 2007. Net income was $113 million and EPS was $0.62 in the third quarter of 2008, compared to $129 million and EPS of $0.61 in the third quarter of 2007.

Total company adjusted EBITDA was $330 million. Worldwide System-wide RevPAR for Same-Store Hotels increased 3.5 percent compared to the third quarter of 2007. System-wide RevPAR for Same-Store Hotels in North America decreased 0.5 percent.

Management and franchise fees increased 6.6 percent compared to 2007. Worldwide RevPAR for Starwood branded Same-Store Owned Hotels increased 0.3 percent compared to the third quarter of 2007.

RevPAR for Starwood branded Same-Store Owned Hotels in North America decreased 0.5 percent. Margins at Starwood branded Same-Store Owned Hotels Worldwide and in North America decreased 208 and 151 basis points, respectively, compared to the third quarter of 2007. Reported revenues from vacation ownership and residential sales decreased 11 percent compared to 2007.

The company signed 36 hotel management and franchise contracts in the quarter representing approximately 8,000 rooms. During the third quarter, the company repurchased approximately 3.7 million shares at a cost of $134 million. Starwood Hotels & Resorts Worldwide, Inc. reported EPS from continuing operations for the third quarter of 2008 of $0.62 compared to $0.61 in the third quarter of 2007.

Excluding special items, which net to a charge of $16 million in 2008 and $14 million in 2007, EPS from continuing operations was $0.71 for the third quarter of 2008 compared to $0.68 in the third quarter of 2007. Excluding special items, the effective income tax rate in the third quarter of 2008 was 29.7 percent compared to 33.0 percent in the same period of 2007. Income from continuing operations was $113 million in the third quarter of 2008 compared to $129 million in 2007.