NEW YORK (AP) — Higher prices and occupancy rates drove the first-quarter profit of Marriott International Inc. up 3 percent, despite a loss in revenue from the spin-off of its timeshare business.
The results beat Wall Street's expectations and the hotel company issued a confident outlook for the rest of the year. Shares rose nearly 4 percent in after-hours trading after the results were released.
"There is tremendous strength in global travel today; travelers are on the road, attending meetings, making sales calls and taking family vacations," President and CEO Arne M. Sorenson said in a statement. Marriott is the first major hotel chain to report first-quarter results.
Marriott, which also operates Ritz-Carlton hotels, Fairfield Inn & Suites and other lodging brands, said Tuesday that it earned $104 million, or 30 cents per share, compared with $101 million or 26 cents per share a year ago.
Revenue fell 8 percent to $2.55 billion from $2.79 billion a year earlier. Marriott had $276 million in revenue from its time-share business in the first three months of 2011. That unit was spun off in November.
Analysts polled by FactSet, on average, expected a profit of 29 cents per share on revenue of $2.61 billion.
Marriott's global revenue per available room rose an average of 6.8 percent from a year ago. That metric climbed at a slightly faster pace in the U.S. than internationally.
Marriott, based in Bethesda, Md., expects to earn between $1.58 and $1.69 per share for the year. Analysts currently expect $1.61.
The company predicts it will fetch higher room prices this year than it expected just three months ago. It now thinks its revenue per available room — a key measure of performance for hotel companies — will rise 6 to 8 percent worldwide this year. In February, it predicted an increase of between 5 and 6 percent.
Marriott will offer more details on the first three months of the year and its forecast for 2012 in a conference call with analysts Wednesday morning.