This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Starwood Lights Up the Hotel Sector

Starwood Hotels & Resorts (HOT - Get Report) shares rallied almost 7% Thursday after the company posted a blowout quarter, raised guidance and said business travel is improving, boosting the entire lodging sector.

Starwood said fourth-quarter net earnings totaled $87 million, or 42 cents a share, down 6.6% from $91 million, or 45 cents a share, a year earlier. But excluding items, which is how Wall Street views the company, Starwood earned 42 cents a share, much higher than the 32 cents a share expected by analysts and nearly twice as much as the 24 cents a share it had in the year-ago quarter.

Revenue rose 3.1% to $1.2 billion, while revenue per available room -- or revpar, a key metric for the hotel industry -- increased 6.6% worldwide and 4.7% in the U.S., indicating that business travel is picking up.

"The positive trends we saw emerge in September continued through the fourth quarter as the weakness in group business was more than offset by continued strength in business transient, powered by significant market share gains in nearly every brand in our system," said Barry Sternlicht, company chairman and CEO. "Indeed, without the major unanticipated increases in workers compensation, our performance and margin growth in the fourth quarter would have been much better."

Shares of Starwood rocketed higher, gaining $2.25 to $37.15, helping touch off a sector-wide rally, spurred by hopes that business travelers will fatten industry profit margins and fuel a strong recovery. The Dow Jones Hotel Index was up 4% by midday, with Marriott (MAR - Get Report) up 3.3% and Hilton Hotels (HLT - Get Report) up 2.5%.

In addition to the strong quarter, Starwood boosted guidance for the first quarter. Assuming revpar increases between 5% and 6% in same-store hotels in North America, Starwood said net income would be $16 million, or 8 cents a share, surpassing current Wall Street expectations of flat earnings.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HOT $58.69 -3.80%
HLT $17.40 -1.10%
MAR $58.29 -2.90%
ESA $0.95 0.00%
FB $99.91 -4.00%


Chart of I:DJI
DOW 15,892.89 -312.08 -1.93%
S&P 500 1,846.54 -33.51 -1.78%
NASDAQ 4,271.0420 -92.1020 -2.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs