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Marriott Profit Rises, Tops Estimate


Marriott International Inc. (MAR), Tuesday reported a better-than-expected increase in fourth-quarter profit, as the U.S. hotel chain gained from higher room rates amid an increase in international travel.

"Worldwide international travel increased to record levels in 2012 while hotel supply growth was low in most markets around the world, especially in the U.S...," said Marriott CEO Arne Sorenson. In October, Sorenson said Marriott is bullish on its North American business.

During the quarter, Marriott's revenue per available room or REVPAR for worldwide comparable system wide properties increased 5.2 percent.

In North America, comparable system wide REVPAR increased 5.9 percent, including a 4 percent increase in average daily rate. International comparable system-wide REVPAR rose 3.2 percent, including a 0.5 percent increase in average daily rate.

Marriott reported fourth-quarter revenues of $3.76 billion, compared to $3.69 billion in the prior year. Eighteen analysts polled by Thomson Reuters estimated revenues of $3.66 billion for the quarter.

The Bethesda, Maryland-based company reported quarterly net income of $181 million or $0.56 per share, compared to $141 million or $0.41 per share last year.

On average, 21 analysts polled by Thomson Reuters expected earnings of $0.55 per share for the quarter. Analysts' estimates typically exclude special items.

During the quarter, Marriott added 37 new properties, or about 14,000 rooms, to its worldwide lodging portfolio.

At the end of the quarter, Marriott's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled 130,000 rooms. To date in 2013, the company has already signed over 9,000 rooms with nearly 90 percent of those in Asia.

Looking ahead to the first quarter, Marriott expects earnings of $0.37 to $0.42 per share, while analysts currently estimate earnings of $0.40 per share.

Marriott expects comparable system wide calendar REVPAR on a constant dollar basis to increase 4 to 7 percent in North America, 2 to 4 percent outside North America, and 3 to 6 percent worldwide in the first quarter.

For fiscal 2013, Marriott anticipates earnings of $1.90 to $2.05 per share, a 10 to 19 percent increase year-over-year. Analysts currently expect earnings of $2.02 per share.

The company expects comparable system wide REVPAR on a constant dollar basis to increase 4 to 7 percent in North America, 3 to 5 percent outside North America, and 4 to 7 percent worldwide in 2013.

Marriott expects investment spending in 2013 to total about $600 million to $800 million.

The company expects to add 30,000 to 35,000 rooms in 2013, while 10,000 rooms will leave the system during the period.

During the fourth quarter, Marriott company repurchased 6.9 million shares of common stock at a cost of $257 million. The Board also increased the company's authorization to repurchase shares to 34.2 million shares.

Additionally, Marriott said it will report its 2013 results on a calendar basis, with fiscal quarters ending on March 31, June 30, September 30 and December 31. The first quarter of 2013 will include 93 days, compared to 84 days in the prior year.

Marriott closed Tuesday $40.83, down 0.97%, on a volume of over 4 million shares on the NYSE. In after hours, the stock dropped 0.83%. In the past year, the stock has traded in a range of $33.93 - $41.84.

by RTTNews Staff Writer

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