Starwood Hotels & Resorts Q4 Adj Profit Tops View, Sees 2014 Adj. EPS Below View

(RTTNews) - Starwood Hotels & Resorts Worldwide Inc. (HOT) said that its fourth-quarter of 2013 net income attributable to common Stockholders declined to $128 million and $0.67 per share, from $142 million and $0.72 per share in the fourth quarter of 2012.

Special items in the fourth quarter of 2013, which totaled an after-tax charge of $13 million, included a pre-tax charge of $19 million related to certain technology development costs that the Company no longer intends to recover from its managed and franchised properties and a pre-tax impairment charge of $17 million associated with a wholly-owned hotel. Special items also included $8 million of net tax benefits primarily associated with the tax law change in Mexico in late 2013 and reversal of tax reserves associated with tax assets which are now deemed realizable.

Special items in the fourth quarter of 2012, which totaled an after-tax charge of $72 million, included a pre-tax charge of $113 million primarily related to the early redemption of $725 million senior notes as well as pre-tax charges of $14 million associated with the impairment of certain hotels and investments.

Earnings per share from continuing operations for the fourth quarter of 2013 of $0.67 compared to $0.33 in the fourth quarter of 2012. Excluding special items, Earnings per share from continuing operations was $0.73 for the fourth quarter of 2013 compared to $0.70 in the fourth quarter of 2012. Analysts polled by Thomson Reuters expected the company to report earnings of $0.70 per share for the quarter. Analysts' estimates typically exclude special items.

Income from continuing operations was $128 million in the fourth quarter of 2013, compared to $65 million in the fourth quarter of 2012. Excluding special items, income from continuing operations was $141 million in the fourth quarter of 2013, compared to $137 million in the fourth quarter of 2012.

Frits van Paasschen, CEO, said, "From what we are seeing, the year 2014 looks to be a better version of 2013. Early indications are that our U.S. and European hotels will see continued strong rate growth. In the fast-growing markets, our view is that - in spite of today's market uncertainty - the long-term trends in urbanization and rising wealth will fuel secular growth in demand for travel. As such, we remain bullish on the long term growth of the industry and on our ability to capture more than our fair share of that growth."

Revenues for the quarter dropped to $1.506 billion from $1.533 billion in the prior year quarter. Seventeen analysts had consensus revenue estimate of $1.53 billion for the quarter.

The Company's Board increased its annual dividend by 8.0% to $1.35 per share. The dividend was paid by the Company on December 27, 2013 to holders of record on December 13, 2013. As previously indiacted, the Company intends to pay dividends to stockholders on a quarterly basis beginning in 2014.

For the first-quarter ended March 31, 2014, the company expects earnings per share to be approximately $0.53 to $0.56, and adjusted EBITDA of approximately $260 million to $270 million. Analysts project first-quarter earnings of $0.64 per share.

Looking ahead for the full year 2014, the company projects earnings per share before special items to be about $2.69 to $2.78, and adjusted EBITDA of approximately $1.200 billion to $1.225 billion. Analysts project annual earnings per share of $3.00.