Yahoo Finance Starwood’s Earnings Beat Guidance and Consensus Estimates
Key Takeaways from Starwood’s 4Q14 and Fiscal Year 2014 Results (Part 4 of 12)
Adjusted earnings
In this part of the series, we’ll discuss Starwood’s (HOT) operating performance. Starwood’s EBITDA (earnings before interest, tax, depreciation, and amortization) beat consensus estimates by 6% in 4Q14—even though revenue missed consensus estimates, as we discussed in the last part of this series.
Starwood’s adjusted EBITDA was $335 million. It was up 6.7% YoY (year-over-year) in 4Q14. The full-year 2014 adjusted EBITDA increased 2% over 2013 to $1,238 million. As noted in the 4Q14 earnings call, Starwood’s fee growth and control in SG&A (selling, general, and administrative) expenses allowed the company to deliver adjusted EBITDA ahead of its guidance range of $310–$320 million.
For Marriott (MAR) and Wyndham (WYN), the adjusted EBITDA increased by 20% and 23% YoY, respectively, in 4Q14. However, for Hyatt (H), the adjusted EBITDA decreased by 18% YoY in 4Q14. Some of these companies are part of ETFs like the Consumer Discretionary Select Sector SPDR Fund (XLY) and the iShares U.S. Consumer Services (IYC).
Earnings per share
Starwood’s diluted EPS (earnings per share) from continuing operations was $0.97. It was up 33% YoY in 4Q14. For full-year 2014, the EPS from continuing operations increased slightly by 1% to $3.02.
Earnings guidance
Starwood expects its fiscal year 2015 adjusted EBITDA to be $1,175–$1,200 million. It expects its fiscal year 2015 adjusted EPS to be $2.87–$2.97. For 1Q15, the adjusted EBITDA is expected to be ~$250–$260 million. The adjusted EPS is expected to be ~$0.53–$0.57.
Spin-off to boost earnings
In February 2015, Starwood announced plans to spin off its vacation ownership business to boost earnings through its asset-light strategy. We’ll discuss this in more detail later in this series.
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