Marriott 2Q Net Up 5.9% On North America, Europe Travel; Revenue Slides
07/11/2012| 05:23pm US/Eastern
By Kristin Jones
Marriott International Inc.'s (>> MARRIOTT INT'A') second-quarter earnings rose 5.9% as the hotel-industry bellwether saw growth in group bookings in the U.S. and foreign travel to Europe, though revenue continued to slide after a spin-off.
The company raised its full-year earnings estimate, now seeing $1.65 to $1.75 a share, compared with its April guidance of $1.58 to $1.69.
Marriott has posted a generally robust recovery from the recession. The company, which operates the Courtyard, Residence Inn and Ritz-Carlton brands in addition to its namesake hotels, has seen U.S. demand rebound. It has also benefited from its exposure to emerging markets like China, where it plans to double its hotels to 100.
The latest quarter's results benefited from corporate customers in North America, travel by U.S., Russian and Chinese visitors to Europe, and strong growth in Asia, said Chief Executive Arne M. Sorenson.
The company expects to add 20,000 to 25,000 rooms in 2012, not including its planned acquisition of Gaylord Entertainment Co.'s (>> Gaylord Entertainment Company) namesake hotel brand and management operations, while 9,000 rooms leave the system. Some new unit openings in Mexico, Asia and the Middle East have been delayed to 2013.
Marriott spun off its costly timeshare business last year, and related expenses and adjustments have put pressure on recent earnings and revenue.
For the latest period, Marriott reported a profit of $143 million, or 42 cents a share, up from $135 million, or 37 cents a share, a year earlier. Adjusting for the timeshare spinoff, the previous-year earnings were 34 cents.
The company in April projected per-share earnings of 39 cents to 43 cents a share.
Revenue slid 6.6% to $2.78 billion, with an impact of $367 million related to the spin-off. Analysts most recently expected $2.84 billion.
Worldwide revenue per available room grew 6.7% on a constant dollar basis. The company had projected growth of 6% to 8%.
For the third quarter, Marriott expects RevPAR worldwide growth of 6% to 8%.
Shares fell 2% to $27.29 after hours. Through Wednesday's close, the stock was up 30% so far this year.
Write to Kristin Jones at firstname.lastname@example.org