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Marriott 3Q Profit Slips 7 Percent

Posted on: Thursday, 4 October 2007, 09:00 CDT

NEW YORK - Marriott International Inc. said Thursday its third-quarter profit fell 7 percent as strong revenue per available room and unit expansion were offset by a decline in timeshare profits and a higher tax rate.

Net income for the quarter ended Sept. 7 slipped to $131 million, or 33 cents per share, from $141 million, or 33 cents per share, in the 2006 period. Per-share earnings for the latest quarter are based on about 31 million fewer shares outstanding.

Excluding the impact of the company's synthetic fuel business, adjusted profit totaled $122 million, or 31 cents per share, down from $144 million, or 34 cents per share, a year ago.

Revenue climbed 12 percent to $3.04 billion from $2.70 billion in the prior-year quarter.

The results beat consensus estimates of analysts surveyed by Thomson Financial, who had expected profit of 30 cents per share on revenue of $2.86 billion. The company on July 12 had forecast earnings of 27 cents to 31 cents per share, on an adjusted basis.

Bethesda, Md.-based Marriott said worldwide revenue per available room, or revPAR, for the company's systemwide properties open at least a year increased 7.7 percent. North American revPAR for company-operated properties grew 7.2 percent.

Looking ahead, the company expects earnings per share for the 2007 fourth quarter to total 61 cents to 63 cents per share on an adjusted basis, with both worldwide systemwide and North American company-owned revPAR rising 6 to 8 percent.

The company expects to permanently shut down its synthetic fuel facilities and cease production of synthetic fuel by Dec. 31, with related costs forecast to be immaterial. Fiscal 2007 profit is estimated between $1.88 and $1.90 per share.

Marriott also said it sees fiscal 2008 profit of $2.10 to $2.25 per share, on a 5 to 7 percent rise in worldwide systemwide and North American company-operated revPAR.

Analysts are expecting quarterly earnings of 68 cents per share, fiscal 2007 earnings of $1.95 per share and fiscal 2008 profit of $2.30 per share.

"Based on favorable group bookings, 2008 is shaping up as another strong year for Marriott International," said J.W. Marriott, Jr., Marriott International's chairman and chief executive. "Our growing pipeline of new hotels implies strong unit growth, and ongoing brand initiatives should enable us to increase our already substantial lead over the competition."

Source: Associated Press/AP Online

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