The FINANCIAL — Starwood Hotels & Resorts Worldwide, Inc. last Friday reported EPS from continuing operations for the third quarter of 2007 of $0.61 compared to $0.71 in the third quarter of 2006. Excluding special items, EPS from continuing operations was $0.68 for the third quarter of 2007, unchanged from the third quarter of 2006. Special items in 2007 net to a charge of $0.07 per share and primarily relate to losses on asset impairments.
Special items in 2006 net to a benefit of $0.03 per share primarily due to one-time income tax benefits realized in connection with the sale of a portfolio of hotels offset in part by losses on asset dispositions. Excluding special items, the effective income tax rate in the third quarter of 2007 was 33.0% compared to 21.2% in the same period of 2006 due to non-recurring capital loss benefits generated in 2006 from the disposition of certain qualifying joint venture interests.
Income from continuing operations was $129 million in the third quarter of 2007 compared to $155 million in 2006. Excluding special items, which net to a $14 million charge in 2007 and a $7 million credit in 2006, income from continuing operations was $143 million for the third quarter of 2007 compared to $148 million in 2006.
Net income was $129 million and EPS was $0.61 in the third quarter of 2007 compared to net income of $155 million and EPS of $0.71 in the third quarter of 2006. Frits van Paasschen, CEO, said, “Starwood reported yet another strong quarter driven by our strong brands, our large presence in the upper upscale and luxury segments, and our international platform, where system-wide REVPAR increased 13.9%. Our pipeline grew to almost 115,000 rooms in the quarter, creating a terrific opportunity for Starwood to continue to grow at above-industry growth rates. Despite the projected 2008 decline in our vacation ownership business, we expect 2008 to be another great year for the Company, as our core hotel business continues to enjoy strong fundamentals. We also repurchased $544 million of our stock in the quarter, a record amount for Starwood.”
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