Marriott International Inc (MAR) on Wednesday reported a 25 percent jump in second-quarter profit as customers flocked to its hotel properties, driving up occupancy and room rates. Marriott's quarterly earnings topped Wall Street estimates by a cent, while revenue fell short of expectations.
The hotel chain detailed some weak earnings outlook for the third quarter, but lifted its profit expectations for 2015.
"We were pleased with our results in the quarter. Our worldwide RevPAR grew over 5 percent and rooms growth increased more than 6 percent. With many hotels reporting peak occupancy rates, room rates continue to move higher," said Marriott CEO Arne Sorenson.
Marriott, based in Bethesda, Maryland, posted second-quarter net earnings of $240 million or $0.87 per share, compared with $192 million or $0.64 per share last year.
Excluding items, adjusted earnings for the quarter were $0.82 per share compared with $0.71 per share a year ago. On average, 23 analysts polled by Thomson Reuters estimated earnings of $0.81 per share for the quarter. Analysts' estimates typically exclude special items.
Marriott's revenues for the second quarter increased 6 percent to $3.69 billion from $3.48 billion in the prior year. Sixteen analysts had a consensus revenue estimate of $3.73 billion for the quarter.
During the quarter, Marriott's revenue available per room, or RevPAR, for worldwide comparable system wide properties increased 5.3 percent, up 5.4 percent in North America. and 4.5 percent internationally.
RevPAR is a metric used to measure financial performance in the hospitality industry, calculated by multiplying a hotel's average daily room rate by its occupancy rate.
Adjusted operating margin improved to 50 percent from 47 percent in the prior year quarter.
For the third quarter, the company has forecast earnings of $0.72 to $0.76 per share, while analysts currently expect $0.77 per share.
For the full year 2015, Marriott now expect earnings of $3.10 to $3.18 per share, from a prior guidance of $3.00 to $3.12 per share. Analysts currently expect earnings of $3.08 per share for the year.
For the third quarter, the company expects comparable system-wide RevPAR on a constant dollar basis to increase 4 to 6 percent in North America, 3 to 5 percent outside North America and 4 to 6 percent worldwide.
For full year 2015, the company expects comparable system-wide RevPAR on a constant dollar basis to increase 5.5 to 6.5 percent in North America, 4.5 to 5.5 percent outside North America and 5.5 to 6.5 percent worldwide.
Earlier, it was expected to increase 5 to 7 percent in North America, 4 to 6 percent outside North America and 5 to 7 percent worldwide.
Marriott closed Wednesday at $77.00, up $2.41 or 3.23%, on a volume of 3.4 million shares on the Nasdaq. In after hours, the stock dropped $1.00 or 1.30% at $76.00.
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