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Higher bookings, rates grow Marriott 2Q net income
NEW YORK — Marriott International Inc said yesterday that its second-quarter net income rose six per cent on higher bookings and rates, despite a revenue decline due to the spin-off of its timeshare business. The Bethesda, Md, hotel company also raised its earnings expectations for the full year but predicts lower revenue from fees and weaker-than-expected growth in Europe and Asia, where the economy has slowed. Shares fell about four per cent after the results were released.
Marriott, which also operates Ritz-Carlton hotels, Fairfield Inn & Suites and other lodging brands, earned $143 million, or 42 cents per share, in the 12 weeks that ended June 15, compared with US$135 million, or 37 cents per share, a year earlier. Revenue slipped seven per cent to US$2.78 billion. Marriott had US$564 million in revenue from its time-share business in the second quarter of 2011. That unit was spun off in November.
The company’s profit matched Wall Street’s estimate but revenue fell short of the expected US$2.83 billion, according to FactSet. Marriott’s results improved worldwide despite slowing economic growth. Revenue per available room rose 6.7 per cent. It expects that metric — a key measure of performance for hotel companies — to grow six to eight per cent this year.
Still, it said markets in the Middle East and Asia are seeing softer demand, especially in luxury hotels. Demand at higher-end properties held up the longest in the recession, but their recovery has been the slowest. Marriott also expects slightly lower revenue from fees this year. That includes charges for extras like Wi-Fi and parking.
The company now predicts profit of US$1.65 to US$1.75 per share for all of 2012. Analysts expect US$1.65. Three months ago, Marriott forecast earnings between US$1.58 and US$1.69 per share. Marriott will offer more details on its financial performance and forecast for the year in a conference call with analysts this morning. The stock lost US$1.50, or 3.9 per cent, to US$37.20 in after-hours trading yesterday. (AP)
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