Starwood Hotels Resorts Worldwide Inc. reported better-than-expected profit in the latest quarter as the company works to close its much-watched merger with Marriott International Inc. that almost fell apart amid a bidding war with a Chinese insurance firm.
Chief Executive Thomas Mangas said the company's results were strong, "despite facing a tough macroeconomic environment and the distraction of a very public bidding war for our company."
Though revenue fell slightly in the quarter, adjusted per-share earnings easily topped Wall Street expectations.
RevPar, a closely watched metric for the hotel industry, decreased 1.3% in comparable world-wide hotels and rose by 1% in constant currencies. In North America, RevPar climbed 1.3%, or 2% in constant currencies.
Starwood?which operates the St. Regis, Westin, Sheraton and W Hotels brands?has been a strong performer in the high-end hotel market and is known for its frequent-traveler rewards program. The company has expanded overseas faster than its rivals. In the latest quarter, Westin and the company's luxury Aloft brand were strongest by RevPar growth. Overall occupancy increased to 67.2% from 66.4%.
The deal with Marriott is slated to form the world's biggest hotel chain, with both companies' shareholders agreeing to the merger agreement in April. The deal has passed regulatory muster in the U.S.
Marriott had been locked in a bidding war with Anbang Insurance Co., a Chinese firm that in March made an unsolicited takeover offer for Starwood that eventually reached roughly $14 billion. After a flurry of negotiations and counterbids, Anbang walked away, citing only "various market conditions."
Starwood said Tuesday the deal with Marriott was expected to close midyear.
For the June-ending quarter, the company said it expects profit before special items between 69 cents and 74 cents, compared with analysts' projections of 73 cents.
Over all in the March quarter, Starwood posted a profit of $90 million, or 53 cents a share, down from $99 million, or 58 cents a share, a year earlier. Revenue edged down 0.8% to $1.4 billion.
Excluding items, income from continuing operations rose to 70 cents a share from 65 cents.
Analysts polled by Thomson Reuters forecast per-share earnings of 58 cents a share on revenue of $1.34 billion.
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