Starwood Hotels misses Q2 estiamtes after divesting Vistana; guides Q3/Q4 EPS in-line; expects deal with Marriot (MAR) to close in the coming weeks
- Reports Q2 (Jun) earnings of $0.71 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus of $0.73; revenues rose 0.4% year/year to $1.25 bln vs the $1.34 bln Capital IQ Consensus.
- Adjusted EBITDA was $297 million, which includes operating earnings from the Company's former vacation ownership business of $19 million and $2 million from the hotels transferred to Interval Leisure Group as part of the vacation ownership spin-off transaction, all of which are classified as discontinued operations.
- Worldwide Systemwide REVPAR for Same-Store Hotels increased 1.4% in constant dollars (increased 0.7% in actual dollars) compared to 2015. Systemwide REVPAR for Same-Store Hotels in North America increased 3.4% in constant dollars (increased 3.1% in actual dollars).
- While the Company expects the Marriott (MAR) transaction to close in the coming weeks, the following outlook assumes that the Company remains an independent Company through December 31, 2016. Full year owned earnings are negatively impacted by approximately $46 million due to asset sales completed in 2015 and 2016, with additional negative impact of ~$20 million due to lost earnings from the five hotels transferred to ILG in connection with the ILG transaction.
- Co issues in-line guidance for Q3, sees EPS of $0.71-0.72, excluding non-recurring items, vs. $0.72 Capital IQ Consensus Estimate. Adjusted EBITDA is expected to be approximately $270 million to $280 million (based on the assumptions below). REVPAR at Same-Store Systemwide Hotels Worldwide is expected to be up 1% to 3% in constant dollars (~80 basis points lower in actual dollars at current exchange rates). REVPAR at Same-Store Systemwide Hotels in North America is expected to be up 3% to 4% in constant dollars and actual dollars at current exchange rates. REVPAR at Same-Store Owned Hotels Worldwide is expected to be up 4% to 6% in constant dollars (~20 basis points lower in actual dollars at current exchange rates).
- Co issues in-line guidance for Q4 (Dec), sees EPS of $0.79-0.84, excluding non-recurring items, vs. $0.83 Capital IQ Consensus Estimate. Adjusted EBITDA is expected to be ~$285 million to $295 million (based on the assumptions below). REVPAR at Same-Store Systemwide Hotels Worldwide is expected to be up 1% to 3% in constant dollars and in actual dollars at current exchange rates. REVPAR at Same-Store Systemwide Hotels in North America is expected to be up 3% to 4% in constant dollars and actual dollars at current exchange rates. REVPAR at Same-Store Owned Hotels Worldwide is expected to be down 1% to up 1% in constant dollars (~50 basis points higher in actual dollars at current exchange rates).