Starwood Announces Strong Earnings
PHOENIX (AP) _ On the heels of a surprise acquisition announcement, Starwood Lodging Co. on Friday announced stronger-than-expected third-quarter earnings.
Starwood Lodging Trust, the nation’s largest real estate investment trust, and Starwood Lodging Corp., the hotel management end of the company, saw a 93 percent growth over last year in funds from operation during the quarter that ended on Sept. 30.
Starwood posted $48.8 million in funds from operation, or 80 cents a share, up from $25.3 million, or 60 cents per share, in the same period of last year. Starwood stock closed up 81 1/4 at $60.37 1/2 per share in trading on the New York Stock Exchange.
The earnings report comes just days after the Phoenix-based company announced that it will acquire ITT Corp. for $9.8 billion.
The combination of ITT and Starwood totals about 650 Sheraton, Westin and Caesar’s hotels and casinos in 70 countries for $10 billion in annual revenue.
Barry S. Sternlicht, the chairman and chief executive officer, said in a statement that the quarterly gains were due to the company’s acquisition of urban upscale hotels. ``The margins are excellent and we expect them to expand further as we renovate our portfolio and raise room rates,″ he said.
Seth Feinstein, a senior analyst at Crowell Weedon & Co. in Los Angeles, said Starwood has been able to consistently exceed analysts’ expectations.
The company has been able to grow aggressively through acquisitions and major renovations. The profitability has also been boosted by Starwood’s management of its hotels. ``They manage their own properties so they aren’t paying someone else to do it,″ Feinstein said.