Starwood Q4 Profit Climbs; To Spin-off Vacation Ownership Business - Quick Facts

(RTTNews) - Starwood Hotels & Resorts Worldwide Inc. (HOT) reported a significant growth in its fourth-quarter 2014 net income attributable to the company to $234 million, or $1.33 per share, from $128 million, or $0.67 per share, last year.

For the recent quarter, earnings from continuing operations were $171 million, or $0.97 per share, excluding special items; while income from continuing operations, including items, totaled $245 million, or $1.40 per share. On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the quarter. Analysts estimates typically exclude special items.

The company clocked revenues of $1.49 billion in the quarter, down 0.9% from the prior-year figure of $1.51 billion. Analysts' consensus revenue estimate for the quarter was $1.53 billion.

The firm's guidance assumes the planned spin-off of the vacation ownership business occurs on December 31, 2015. Transaction costs related to the planned spin-off are not included in full year selling, general and administrative expense guidance.

For the first quarter ended March 31, 2015, the company sees adjusted EBITDA to be around $250 million to $260 million and EPS to be approximately $0.53 to $0.57. Analysts expect the company to report earnings of $0.64 per share for the first quarter.

Looking ahead to the full year 2015, EPS before special items is expected to be about $2.87 to $2.97 and adjusted EBITDA to be some $1.175 billion to $1.20 billion. Analysts project earnings of $3.13 per share for 2015.

Separately, Starwood announced plans to spin-off its vacation ownership business, Starwood Vacation Ownership or "SVO", into a separate publicly traded company. The transaction, which is likely to be tax-free to Starwood shareholders, would be effected via. a pro rata distribution of the new entity's stock to existing Starwood shareholders.

Further to accelerating Starwood's ongoing 'Asset Light' transformation, the transaction would create a new pure-play vacation ownership firm with a seasoned management team and a strong balance sheet to take advantage of enhancing growth opportunities within the timeshare industry. SVO reported vacation ownership revenues of around $640 million in 2014.

According to the planned spin-off, the new company would become the premier Upper Upscale timeshare company; develop and operate SVO's 22 timeshare resorts, including award-winning resorts in top vacation destinations such as Hawaii, Orlando, Mexico and the Caribbean. The new firm would expand its existing developments within its current portfolio of best-in-class destinations. It would continue to be headquartered in Orlando, Florida, providing career opportunities to current and new associates.