Shares of Starwood Hotels & Resorts Worldwide Inc. climbed Thursday after the hotel and leisure company lifted its full-year profit outlook and its adjusted first-quarter earnings topped Wall Street's expectations.
White Plains, N.Y.-based Starwood reported quarterly net income of 44 cents per share, excluding a $4 million charge for severance and other costs. The results beat the 25-cents-per-share estimate of analysts polled by Thomson Financial.
The company also boosted its 2008 earnings forecast to a range of $2.40 to $2.58 per share, up from a range of $2.32 and $2.57 per share. It expects second-quarter profit between 50 cents and 54 cents per share.
Analysts predict 2008 net income of $2.42 per share and second-quarter profit of 55 cents per share.
Jake Fuller of Thomas Weisel Partners LLC said Starwood's quarterly results and in-line second-quarter forecast would likely provide a sense of relief for investors following Marriott International Inc.'s soft first-quarter earnings results and lowered 2008 profit forecast.
In a client note, Fuller said Starwood is likely to outperform in the near term in comparison to other large-cap hotel stocks, but cautioned that weakening business travel may hurt results later in the year.
He reaffirmed a "Market Weight" rating and $53 price target.
Goldman Sachs analyst Steven Kent said he had a hard time interpreting Starwood's quarterly results, which he attributed partly to a forward shift of some timeshare results and lower net interest. He continues to be wary of sector trends that could affect the company, such as increasing supply and slowing economic conditions in the U.S. and Europe.
The lodging sector has been pressured of late as consumers curb spending due to the ongoing housing downturn, escalating fuel costs, diminishing credit and recession concerns.
Shares of Starwood Hotels & Resorts added $3.37, or 6.8 percent, to $52.99. Over the past year, the stock has traded between $37.07 and $75.45.
Terms & Conditions
RSS Headlines
Fool UK