Starwood Hotels & Resorts Worldwide (NYSE:HOT) said Tuesday its first-quarter earnings surged 66% to surpass Wall Street expectations, as lower costs offset a decline in revenue.
The Connecticut-based hotel operator, which owns the Westin, Sheraton and W Hotels brands, raised its full-year outlook to per-share earnings of $2.75 to $2.83, compared to its previous view of $2.59 to $2.68. Starwood’s earnings view for the current quarter of 70 cents to 73 cents a share met consensus estimates.
Recovering business travel worldwide has given Starwood a boost, and the company recently announced plans to expand its footprint in Europe and the Middle East over the next five years.
In the latest period, Starwood’s profit climbed to $213 million, or $1.09 a share, from $128 million, or 65 cents a share, in the year-ago period. Adjusted per-share earnings, which exclude restructuring and other charges, were 76 cents versus 63 cents.
When the company provided its first-quarter forecast in February, it anticipated per-share earnings of 51 cents to 54 cents, above Wall Street views at the time. Analysts most recently anticipated 53 cents a share.
Revenue declined 10 % to $1.54 billion, beating calls for $1.47 billion. Costs and expenses dropped 12%.
Meanwhile, revenue per available room grew 5% globally systemwide at comparable hotels in constant dollars. In actual dollars, the metric climbed 4.6%.
Vacation ownership revenue jumped 16% to $177 million, while residential revenue fell 64%.
“We had a solid first quarter across all lines of our business,” Chief Executive Frits van Paasschen said in a statement. “Overall, the global lodging recovery continues along the trend lines we've been seeing. Tight supply is driving higher room rates in North America, and our footprint continues to expand in the growing economies. We are seeing more interest among real estate buyers for both vacation ownership and our owned hotels.”
Shares of Starwood were trading 2.7% higher at $64.14 in early morning trading.