Starwood Soars After Timeshare Announcement
Starwood Hotels & Resorts Worldwide shares jumped nealry 10% in morning trading today following news that the Sheraton and W hotel brand operator would spin off its timeshare unit into a public company. Starwood had climbed to $78.08, a 9.6% gain, at 11:31 AM, and signals the success of the company's plan of shedding real estate and concentrating on franchising and property management. Starwood recently made $399M off the sale of Sydney's Sheraton on the Park.
“The spinoff is absolutely a positive because it removes a cash-drag business from them,” FBR & Co. analyst Nikhil Bhalla told Bloomberg. “The vacation-ownership business requires continuous investments in the existing properties and development of new ones.”
Indeed, the spin-off made up for a disappointing revenue decline to $1.49B from $1.51B. Net income, however, jumped from $0.68 per share to $1.33 a share, easily outpacing economists' projections of $0.76 uptick in net income.
