Marriott's 2nd-qtr profit up 13 percent

AP News
Posted: Jul 13, 2011 6:37 PM
Marriott's 2nd-qtr profit up 13 percent

Marriott International's second-quarter net income rose 13 percent as the hotel operator benefited from higher room rates and a growing base of hotels.

The company, which operates the Marriott, Ritz-Carlton and other lodging brands, reported Wednesday that it earned $135 million, or 37 cents per share, for the quarter that ended June 17. That met analyst expectations and is up from $119 million, or 31 cents per share, earned in the same quarter last year.

Revenue rose 7 percent to roughly $3 billion to beat analysts' average forecast for $2.58 billion, according to FactSet.

Lodging companies struggled during the recession as both business and leisure travelers stayed home to save money. But demand has picked up and the industry appears to continue its upward swing.

"It encourages us," said Laura Paugh, senior vice president of investor relations for Marriott International. "Business travel is up; it appears corporate spending continues to be strong in the lodging sector. The leisure business has also held up well."

Marriott said revenue per available room, a key industry metric, rose 7.7 percent during the period. The company also benefited from higher prices, as its average daily rate rose 4.5 percent.

Marriott added 32 new properties during the quarter. It operated more than 3,600 hotels and timeshare resorts as of the quarter's end.

The company said it expects to earn $1.35 to $1.43 per share for the full year. Analysts anticipate $1.42 per share.

Shares of Marriott fell $1.58, or 4.3 percent, to $35.56 in after-hours trading after the company reported its results. They had risen 32 cents during regular trading Wednesday to end at $37.14, and they'd risen in recent weeks from a mid-June low near $33.

Company officials will discuss the earnings report on a webcast and conference call with analysts and the media at 10 a.m. Eastern time Thursday.