In a sign of renewed travel demand, Marriott International (MAR) turned a profit in its fiscal third quarter, up from a loss in the year-ago quarter. The hotel chain on Wednesday posted a net income of $83 million, or 22 cents per share, compared to a loss of $466 million, or $1.31 per share, in the same quarter last year.
While the earnings met analysts' expectations -- which averaged 22 cents per share, according to a Thomson Reuters poll -- its quarterly revenue came in slightly below analysts' $2.66 billion estimate. Revenue for Marriott, which took a $614 million one-time charge a year ago related to its timeshare operations, increased 7.2% to $2.65 billion in the third quarter, which ended Sept. 10.
And Marriott's guidance for the current quarter disappointed investors, pushing shares downward in after-hours trading. The company forecast that earnings for the current quarter will range from 33 cents to 36 cents a share, bringing the midpoint of the range below the 36 cents a share that analysts are predicting. In extended trading, shares had fallen 2.5% to $36.90 by about 9:30 p.m. Eastern time.
But if the third quarter is an example, Marriott could well come in at the top of its range: The company in July estimated third-quarter earnings of 18 cents to 22 cents a share.
Marriott, which operates more than 3,500 hotels in 70 countries, appeared to benefit from a rebound in travel spending as both domestic and overseas tourists began planning trips again in the last few months. The company boosted both average room rates and occupancy levels in the third quarter. In August, occupancy grew 6.4 percentage points to 63.9%, while the revenue per available room -- a measurement that factors in both occupancy and daily room rates -- increased 8.1% from a year earlier to $63.08, according to hotel-industry research firm STR Global.
"We are having an outstanding year," Marriott CEO J.W. Marriott Jr. said in a statement. "Corporate and leisure demand continues to strengthen, and we are leading the U.S. industry in pushing retail price increases."
Marriott will host a conference call reviewing its earnings tomorrow. Competitor Starwood Hotel and Resorts Worldwide (HOT) reports its third-quarter earnings later this month.