Hotel chain operator, Marriott International Inc. (NYSE: MAR) reported better-than-expected fiscal third-quarter earnings, thanks to higher occupancy rate in North America, rising room rates in the wake limited room supply and company’s cost-cutting measures, helping the company offsetting weakness in Europe.
Nevertheless, the company sounded cautious for its current quarter. The company projected lighter-than-expected profit outlook, citing weakness in the global macroeconomic environment. For Marriott International, North America accounts for 75% for total revenue.
For the quarter which ended September 7, the Company reported net income of $ 143 million, or 44 cents a share, compared to a net loss of $179 million or 52 cents a share, in the year earlier quarter.
Analysts polled by Thomson Reuters had forecasted earnings of 40 cents a share.
Revenue stood at $2.73 billion, down from $2.87 billion, in the year earlier quarter.
Comparable systemwide revenue-per-available room (revPAR), an important gauge in the hospitality industry, rose 6.3% during the fiscal third quarter.
Meanwhile in the international markets, revPAR in Europe climbed 3.8%, partially helped by summer Olympics in London, revPAR in Asia-Pacific climbed 6.8% while in Middle East and African, it soared 13%, in the quarter.
For the fiscal fourth quarter, Marriott International expects earnings per share to fall within the range of 52 cents to 56 cents even as analysts’ consensual estimate is for 57 cents. According to Company’s spokeswoman, Laura Paugh, weakness in macroeconomic environment, especially slowing Europe was a great Challenge.
“The economy in Europe has been hidden by the special events you saw in the third quarter,” said Paugh while addressing analysts in conference call. Paugh also added that Marriott International now anticipates “very modest revPAR improvement” in the fourth quarter.
Comparable system-wide revPAR (without taking into consideration the effects of foreign currency market fluctuation) is expected to increase 5% to 7% in North America, 3% outside North America and 4% to 6% worldwide.
Revenue is expected to fall within the range of $445 million and $455 million.
For fiscal 2012, Marriott International anticipates revenue in the range of $1,406 million to $1,416 million, down from the earlier estimates of $1,410 million to $1,440 million. However, earnings per share projection for fiscal 2012 has been upwardly revised from $1.65-$1.75 to $1.68-$1.72.
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