- The Washington Times - Friday, February 15, 2008


Hotel operator Marriott International Inc. says its fourth-quarter earnings fell 20 percent as it took a hit from the closure of its synthetic fuel business, offsetting overseas gains.

The Bethesda-based company also lowered its yearly outlook based on more modest calculations for its core lodging division, a forecast that fell below expectations for this year.

The company said it remained bullish on its long-term growth but warned that a softening U.S. economy could hurt profits in the coming year.

“We are looking at the future with some caution in mind,” said Arne Sorenson, Marriott’s chief financial officer.

Marriott said it earned $176 million or 46 cents per share, down from $220 million or 52 cents per share in the same quarter of 2006.

The company posted a 7.7 percent increase in revenue, to $4.1 billion. Without the cost of discontinuing its fuel business, the results met estimates.

Analysts generally exclude one-time events from their outlooks.

But Marriott came in short of analysts’ full-year expectations and forecast between $2 and $2.10 per share in 2008, compared with the $2.10 to $2.25 per share outlook it put out in October. Analysts expect earnings this year of $2.13 per share.

Marriott expects earnings of between 32 cents to 34 cents this quarter while analysts had been predicting 41 cents.

Marriott’s shares rose 22 cents to $35.12.

Marriott said revenue per available room, a common lodging industry measure known as “revpar,” was up 8.1 percent worldwide. Revpar was up 6.2 in North America, where the majority of Marriott’s hotels are located, but soared 15.5 percent overseas. Average daily room rates in North America were up 5.6 percent and nearly 14 percent internationally.

Marriott had run four synthetic fuel production plants but liquidated its holdings at the end of last year when a federal tax-credit program ended. The business had helped Marriott weather a post-September 11, 2001, travel slump.

Like other lodging companies, Marriott has seen robust growth in room rates in recent years as room supply continues to trail demand from travelers. But investors are carefully watching the company’s revenue per available room results to watch for any sign of slowing.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide