SEARCH NEWS:

 

Starwood Reports Loss

Revenue fell 1.2 percent amid the "distressed" travel environment, said the White Plains-based hotel and leisure giant.

The owner of St. Regis, Sheraton and other hotel chains around the world reported a loss of $116 million, or 58 cents a share. That compares with net income of $32 million, or 16 cents a share, in the prior first quarter.

In Las Vegas, Starwood is in a partnership bidding for the bankrupt Aladdin resort on the Strip. Starwood would manage the Aladdin hotel under its Sheraton brand and is also considering building a 600-unit Westin Vacation Resorts time share property at the Aladdin.

Starwood's Westin brand also is coming to Las Vegas at the former Maxim hotel near the Strip, which last year was purchased by Cincinnati-area company Columbia Sussex Corp.

Barry Sternlicht, chairman and chief executive officer, said in a conference call this morning that if his partnership is the successful bidder for the Aladdin property, the company's two key franchise flags would be represented in Las Vegas.

"It's an attractive destination for us," Sternlicht said. "We may look at other opportunities in the market from time to time if opportunities exist."

He stressed that Starwood is not re-entering the gaming business and that the casino at what would become the Planet Hollywood hotel-casino would be operated by other partners in the bid. Starwood results for the latest quarter included an impairment charge of $104 million associated with the planned sale of an 18-hotel portfolio in North America, and other items.

Among items in the prior first quarter was a gain of $15 million, related to devaluation of the Argentine peso.

Excluding items, Starwood said its loss in the latest quarter came to 8 cents a share, in contrast to profit of 9 cents a share for the first quarter of 2002.

Late last month, Starwood withdrew its earnings outlook for the first quarter and full year, citing the deterioration in business stemming from the war in Iraq. In January, Starwood had projected earnings of 4 cents a share for the quarter and between 98 cents to $1.07 a share for the full year.

Analysts subsequently lowered their expectations. The latest Wall Street estimate was for a first-quarter loss of 2 cents a share, according to Thomson First Call.

Revenue fell to $1.07 billion from $1.09 billion. Revenue per available room, the industry benchmark for performance, fell 1.7 percent.

Just before the end of the quarter, Starwood approved a plan to sell the 18 North American hotels. The company expects to sign a definitive agreement in the coming months and close the sales in the second half of the year. Starwood projects about $1.1 billion in proceeds from the sales.

The Middle East situation, weakness in global economies, the outbreak of severe acute respiratory syndrome and the threat of terrorist events make predicting future results extremely difficult, Starwood said.

The company offered a possible scenario, rather than a specific forecast, that would put full-year earnings at 70 cents to 80 cents per share.

First Call's current earnings projection for the year is 83 cents a share.

Starwood shares were at $26.71 in early trading today, up 19 cents, or 0.7 percent, on the New York Stock Exchange.

< Gaming News