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 companyâ€™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 analystsâ€™ consensual estimate is for 57 cents. According to Companyâ€™s spokeswoman, Laura Paugh, weakness in macroeconomic environment, especially slowing Europe was a great Challenge.
â€śThe economy in Europe has been hidden by the special events you saw in the third quarter,â€ť said Paugh while addressing analysts in conference call. Paugh also added that Marriott International now anticipatesÂ â€śvery modest revPAR improvementâ€ťÂ 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.