Starwood, Hyatt First Quarter 2016 Results Exceed Expectations
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The year 2016 promised to be huge for Starwood Hotels & Resorts Worldwide and so far it's lived up to expectations, with the hotel company finding itself at the center of a bidding war between Marriott International and a Chinese consortium led by the Anbang Insurance Group.
Despite weeks of uncertainty the Stamford, Connecticut-based company finds itself right where it began the year, poised to merge with Marriott.
But in addition to its pending acquisition, Starwood is looking ahead to a better-than-expected year in terms of financial performance.
The company reported its first quarter 2016 results Tuesday, revealing adjusted earnings per share of $0.70 for the three-month period ended March 31, trumping the $0.58 projected by analysts surveyed by Zacks Investment Research.
Starwood's first quarter revenue of $1.4 billion also beat projections, and occupancy climbed 0.8 percent to 67.2 percent.
Despite the aforementioned challenges, Starwood CEO Thomas Mangas said the company "achieved these results by staying focused on execution."
But it's also a memorable quarter for the company in terms of development. "Our strong pace of development continued in the first quarter, with 18 hotels opened and 44 new hotels signed, the highest level of signings in a first quarter since 2007," added Mangas.
In wake of its strong opening quarter, Starwood has revised its yearly projections and now forecasts full-year earnings of approximately $3 to $3.06 per share, up from $2.74 to $2.84 per share originally.
Hyatt's Opening Quarter Proves Solid
The first quarter of 2016 was also a strong one for Hyatt Hotels, which earned $34 million during the three-month period ended March 31, up from $22 million during the same period in 2015.
The company's $0.25 EPS bested Wall Street projections by a penny and first quarter revenue also topped expert projections at $1.09 billion. The figure represents a notable jump from the same period last year when Hyatt reported revenue of $1.05 billion.
In a statement, Hyatt president and CEO Mark Hoplamazian said, "we are pleased with our solid start to the year and encouraged by positive trends in our business."
"Our first quarter results reflect solid progress toward our goal to become the most preferred hospitality brand, as we gained RevPAR market share in each of our segments," he added.
A strong indicator of success, comparable systemwide revenue per available room climbed 2.2 percent during the first quarter.
Like Starwood, Hyatt also started the year strong in terms of growth, opening 21 new hotels and adding a new brand in the Unbound Collection by Hyatt.
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