NEW YORK (AP) -- Marriott International Inc. turned a better-than-expected profit in its fourth quarter driven by an increased number of rooms in the hotel company's portfolio and higher occupancy and room rates.
The company, based in Bethesda, Md., said Tuesday that it earned $181 million, or 56 cents per share, in the three-month period that ended Dec. 28. That's up from $141 million, or 41 cents per share, a year ago.
Revenue in the quarter rose 2 percent to $3.76 billion. The results narrowly topped Wall Street's expectations for earnings of 55 cents per share and revenue of $3.67 billion, according to FactSet.
Marriott's board also increased its authorization for buying back stock by an additional 25 million shares, lifting the total to 34 million shares.
Marriott doesn't own most of the hotels in its system but makes money off either managing or franchising its 18 brands, which include Ritz-Carlton, Fairfield Inn & Suites, Courtyard, SpringHill Suites, and Renaissance.
The company added a net of 17,000 hotel rooms worldwide to its collection in 2012. Not all of those rooms are new construction: 20 percent were converted from other brands and 30 percent came from the acquisition of the Gaylord brand. For 2013, the company expects to 30,000 to 35,000 new rooms worldwide while losing about 10,000 existing rooms.
For the year, the strongest regions were the Middle East and Africa as well as Asia. The average daily room rate in the Middle East and Africa actually fell 1 percent in 2012. However, occupancy jumped 5.3 percent — the biggest growth in the Marriott system. In Asia, rates climbed 3 percent while occupancy was up 3.7 percent.
"Worldwide international travel increased to record levels in 2012 while hotel supply growth was low in most markets around the world, especially in the U.S.," CEO Arne M. Sorenson said in a statement.
Looking ahead, the company noted it has already signed 9,000 rooms in the first six weeks of 2013, with 90 percent of those in Asia. A third of the rooms came from the addition of seven hotels in Thailand owned by TCC Hotels Group. That deal alone, added 3,000 rooms to Marriott's existing 3,110 in Thailand.
China continues to be a big growth market. Marriott is currently in 16 cities there but hopes to be in 50 by 2016.
The company is also pushing to expand its domestic presence.
Laura Paugh, senior vice president of investor relations, told The Associated Press in a phone interview that 24 percent of rooms under construction in the U.S. will be under the Marriott flag. That compares to about 10 percent of the current supply.
For full-year 2012, Marriott earned $571 million, or $1.72 a share, compared with $198 million, or 55 cents a share in 2011.
The company forecast first-quarter earnings of 37 cents to 42 cents a share, and full-year 2013 earnings of between $1.90 and $2.05 a share.
Analysts on average are expecting 40 cents a share in the first quarter and $2.03 a share for all of 2013.
Shares of Marriott were down nearly 1 percent in after-hours trading.
- Investment & Company Information