Starwood Hotels & Resorts Worldwide Inc.
) is slated to release its third-quarter 2012 results on October
25, before the opening bell. The current Zacks Consensus Estimate
for the third quarter is 53 cents per share on revenue of
The current Zacks Consensus Estimate for the third quarter
earnings per share reflects year-over-year growth of 26.07%.
With respect to earnings surprises, over the trailing four
quarters, Starwood has outperformed the Zacks Consensus Estimate
in the range of 7.69% to 24.56%. The average earnings surprise
was 16.88%. This implies that the company has surpassed the Zacks
Consensus Estimate by the said magnitude over the last four
Second Quarter Recap
Based in White Plains, New York, Starwood reported
second-quarter 2012 adjusted earnings from continuing operations
of 70 cents. It comprehensively surpassed the Zacks Consensus
Estimate of 62 cents as well as the year-ago level of 50 cents.
On a GAAP basis, earnings from continuing operations were 66
cents compared to 77 cents in the second quarter of 2011.
Revenues grew 13.5% year over year to $1,618 million in the
quarter, with revenue per available room (RevPAR) witnessing
strong growth. Revenues also outperformed the Zacks Consensus
Estimate of $1,550.0 million.
For third-quarter 2012, earnings are expected to be
approximately 50 to 54 cents per share (including Bal Harbor
Earnings Estimate Revisions - Overview
Ahead of the earnings release, we have noticed a slight
negative sentiment prevailing around the stock.
Agreement of Estimate Revisions
For the upcoming third quarter, no analyst covering the stock
revised the estimate in the last 7 days. However, only one
analyst out of 19 slashed the same in the last one month while
none went for the upward revision.
Magnitude of Estimate Revisions
There has been no change in estimates in the last two months
for the third quarter. Therefore, the analysts expect the company
to report in line.
We remain optimistic on the company's strong pipeline,
significant international exposure, shift to a fee-based business
model, asset disposition strategy, portfolio restructuring, and
strategy of existing asset revamp. Compared to its peers, the
company is also expanding at a steady pace. Moreover, share
repurchase activity and dividend distribution are the other
positives of the stock.
However, slowdown in 2012 RevPAR growth in North America as
well as in some Chinese cities make us cautious on the stock.
Some major renovations and a negative exchange rate shift are
some near-term causes of concern.
Starwood currently carries a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on the stock.
Another prominent hotelier,
Wyndham Worldwide Corporation
), is slated to release its third-quarter 2012 earnings on
October 24, 2012.
STARWOOD HOTELS (HOT): Free Stock Analysis
WYNDHAM WORLDWD (WYN): Free Stock Analysis
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