* Third-quarter net income 44 cents a share
* Analysts expected 40 cents on average
* Q4 forecast lags analyst views
By Karen Jacobs
Oct 3 Hotel operator Marriott International
reported a higher-than-expected quarterly profit on
Wednesday on stronger group and corporate business and lower
costs, sending its shares higher in extended trading.
Still, the company's profit outlook for the current quarter
came in below average analyst estimates as Marriott cited
weakness in international markets.
A demand recovery in North America and rising room rates in
the face of limited supply growth is helping Marriott offset
softness in Europe. North America accounts for 75 percent of
business at Marriott, whose brands include Ritz-Carlton,
Residence Inn and Courtyard.
"We're not seeing a slowdown in Marriott fundamentals," said
MLV & Co. analyst Ryan Meliker. "Group pace going forward looks
pretty strong as does their expectation for corporate rate
growth next year."
Net income came to $143 million, or 44 cents a share, in the
fiscal third quarter ended Sept. 7, compared with a loss of $179
million, or 52 cents a share, a year earlier.
Analysts expected 40 cents a share, on average, according to
Thomson Reuters I/B/E/S.
Quarterly revenue fell to $2.73 billion from $2.87 billion a
At Marriott, revenue per available room, a key industry
measure, rose 6.3 percent at comparable systemwide hotels in
North America in the third quarter.
International markets had systemwide revPAR gains, with
Europe up 3.8 percent aided by the Olympic Games in London,
Asia-Pacific up 6.8 percent and Middle East and Africa up 13
Results were helped by rising revenue tied to group meetings
and corporate travel. Marriott said it is negotiating corporate
business for next year and is looking to achieve high
single-digit-percentage increases in room rates.
Marriott forecast per-share profit of 52 cents to 56 cents a
share for the fourth quarter, compared with 57 cents expected by
analysts. Spokeswoman Laura Paugh said international weakness,
particularly in Europe, was a challenge.
"The economy in Europe has been hidden by the special events
you saw in the third quarter," Paugh said. She said Marriott
expects "very modest revPAR improvement" there in the fourth
quarter. Europe accounts for about 9 percent of Marriott fees.
Marriott shares rose to $39.72 in extended trading from
their close of $39 on the New York Stock Exchange on Wednesday.