Marriott turned a profit in 3Q on higher prices
NEW YORK (AP) — Marriott International Inc. said Wednesday that it turned a bigger-than-expected profit in the third quarter on higher prices and strong occupancy rates.
The company earned $143 million, or 44 cents per share, compared with a loss of $179 million, or 52 cents per share, a year ago. The 2011 quarter was hit by charges related to the spin-off of its time share business. Without those, it earned $104 million or 29 cents per share last year.
Revenue in the quarter, which ended Sept. 7, fell 5 percent to $2.73 billion.
The results topped Wall Street's and Marriott's own expectations. Analysts polled by FactSet expected a profit of 40 cents per share on revenue of $2.65 billion. In July Marriott forecast per-share earnings of 39 to 41 cents.
Marriott is the first major hotel company to report earnings for the peak summer travel season. The company, which based in Bethesda, Md., also operates Ritz-Carlton hotels, Fairfield Inn & Suites, Courtyard and Renaissance, among other brands.
Revenue per available room, a key performance measure for hotel companies, rose 7 percent in the quarter. That metric includes everything from the price of the room to what visitors spend at the minibar.
In a statement president and CEO Arne Sorenson said the summer pickup was widespread. Group revenue at Marriott Hotels and Resorts in North America rose 8 percent in the third quarter with room rates up 3 percent. Revenue per room for all other travelers rose 6 percent, with strong last-minute demand. Marriott offered fewer discounts than usual, which helped to increase average rates.
For the fourth quarter, the company expects revenue per room to rise 5 to 7 percent in North America, but only 3 percent elsewhere.
Next year it sees that metric continuing to increase at a mid-single digit rate despite sputtering growth in Europe, the Middle East and Asia.
Marriott shares rose nearly 2 percent in after-hours trading. They finished up 37 cents in the regular session to end at $39.