Marriott International Inc posted higher-than-expected fourth-quarter earnings and lifted its 2010 outlook on Thursday as business improved, especially at its international hotels.
The company said it expected revenue per available room to be up 2 percent to down 2 percent in 2010. Its earlier range was flat to down 5 percent.
The international markets will show a quicker pace of recovery, said FBR Capital Markets analyst Patrick Scholes. The overall theme is Marriott continues to see things improving.
The largest U.S. hotel company by market value reported income from continuing operations of $106 million, or 28 cents per share, compared with a year-earlier loss of $10 million, or 3 cents per share.
Excluding one-time items, profit was 32 cents per share. Analysts on average had expected 26 cents, according to Thomson Reuters I/B/E/S.
Revenue fell to $3.4 billion from $3.8 billion. Analysts had expected $3.2 billion.
With Marriott's results, all three of the major hotel operators that have reported quarterly earnings in the past two weeks -- including Starwood Hotels & Resorts and Wyndham Worldwide -- have beaten Wall Street estimates.
Between when these companies last reported in early October until now, demand trends of the hotel business simply got stronger than people expected, especially in December, Scholes said.
IMPROVED BUSINESS TRAVEL ABROAD
The slide in demand for business travel over the past year and a half has hurt hotel operators like Marriott, which rely on corporate customers to fill rooms midweek. However, bookings have strengthened in recent months, hotel operators have said.
Even adjusting for easier year-over-year comparisons, business travel showed signs of improvement, particularly in international markets, Chief Executive J.W. Marriott said in a statement.
Marriott, which operates the Marriott, Courtyard and Residence Inn hotels, expects first-quarter earnings per share between 15 cents and 21 cents. Analysts on average expect 18 cents.
Marriott expects growth in 2010 to come from hotels outside North America. It forecast revPAR as flat to up 5 percent in those properties and flat to down 3 percent in North America.
Shares of Marriott were up 0.8 percent at $26.60 in trading before the market opened.
(Reporting by Deepa Seetharaman; Editing by Lisa Von Ahn and Gerald E. McCormick)