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Bankruptcy Watch: 9 Risky Hotel Stocks


Starwood Hotels & Resorts Worldwide (HOT)

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Altman Z-Score, Trailing 12 Months: 1.84

Altman Z-Score, Last Fiscal Year: 1.84

Starwood Hotels & Resorts Worldwide (HOT)

Starwood Hotels' Z-Score remained flat at a reading of 1.84 in the trailing 12 months, staying just inside the gray area and out of any real threat of bankruptcy.

The hotel and vacation ownership company operates hotels under the St. Regis, W, Westin, Le Meridien, Sheraton, and Four Points brands, among others.

Starwood is due to report its second-quarter financial results on July 28. Analysts on average expect it post a profit of $89.6 million, or 46 cents per share, on revenue of $1.41 billion. That would compare with year-earlier earnings of $114 million, or 61 cents per diluted share on revenue of $1.29 billion.

In April, Starwood said its first-quarter net income fell 7.1% year-over-year as charges related to a Japanese hotel investment pressured results. It earned $28 million, or 14 cents per share, though its profit excluding the charge would have been 30 cents per share, beating expectations by a nickel. Quarterly revenue rose 9.2% to $1.3 billion, also topping forecasts, as luxury travel picked up momentum.

In the first quarter, despite what CEO Frits van Paasschen called "turmoil in North Africa and the Middle East and the devastating earthquake in Japan," worldwide revPAR -- or revenue per available room, a key metric in the hotel industry that multiplies a property's room rate by its occupancy rate -- jumped 10.4%. The metric was up 11.1% in North America. RevPar had suffered in recent years as cash-strapped travelers were unwilling to pay for high-priced hotel rooms, even at luxury level establishments.

Starwood also offered an improved full-year profit guidance, or $1.60 to $1.70 per share, in line with analysts' expectations. "The outlook for the rest of the year looks promising as we view the events of the past few months as not having derailed the overall global economic recovery," van Paasschen said at the time.


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