Starwood Hotels Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Starwood Hotels (NYSE:HOT) will unveil its latest earnings on Thursday, October 25, 2012. Starwood Hotels & Resorts Worldwide operates in the hotel and leisure business. Its brand names include St. Regis, The Luxury Collection, W and Westin.

Starwood Hotels Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 53 cents per share, a rise of 26.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 52 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 53 cents during the last month. For the year, analysts are projecting net income of $2.54 per share, a rise of 31.6% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 10 cents, coming in at profit of 71 cents a share versus the estimate of net income of 61 cents a share. It marked the fourth straight quarter of beating estimates.

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Wall St. Revenue Expectations: On average, analysts predict $1.48 billion in revenue this quarter, a rise of 8% from the year-ago quarter. Analysts are forecasting total revenue of $6.32 billion for the year, a rise of 12.5% from last year’s revenue of $5.62 billion.

A Look Back: In the second quarter, profit fell 6.9% to $122 million (62 cents a share) from $131 million (68 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 13.5% to $1.62 billion from $1.43 billion.

Stock Price Performance: Between July 26, 2012 and October 19, 2012, the stock price rose $3.01 (5.7%), from $52.71 to $55.72. The stock price saw one of its best stretches over the last year between January 17, 2012 and January 25, 2012, when shares rose for seven straight days, increasing 8.2% (+$4.15) over that span. It saw one of its worst periods between March 26, 2012 and April 4, 2012 when shares fell for eight straight days, dropping 6.1% (-$3.60) over that span.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 9.3% in the third quarter of the last fiscal year, 14.3% in the fourth quarter of the last fiscal year and 32.4% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.09 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Analyst Ratings: With 14 analysts rating the stock a buy, none rating it a sell and seven rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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