Marriott earnings rise but hotel outlook dims

Hotel operator Marriott International Inc. said Thursday that its second-quarter earnings rose 11% on higher demand for rooms, but its stock dipped on signs that growth in the lodging industry may be cooling off.

Marriott lowered the upper end of its growth forecast for North American revenue per available room, a key hotel industry benchmark.

The Bethesda, Md.-based company reported net income of $207 million, or 51 cents a share, for the three months ended June 15, up from the $186 million, or 43 cents, a year earlier.

Revenue rose to $3.21 billion from $2.89 billion a year earlier.

Excluding a charge of $54 million, or 13 cents a share, because of a tax settlement and the results of the company’s synthetic fuel business, second-quarter earnings were $229 million, or 57 cents a share.

Analysts surveyed by Thomson Financial, who generally exclude one-time charges from their outlooks, forecast second-quarter net income of 53 cents a share on revenue of $3.17 billion.

Shares of Marriott fell $1.31, or 2.8%, to $45.04. The shares have declined 5.6% this year after a 43% gain in 2006.

Marriott raised its outlook for the year slightly, predicting it would earn between $1.88 and $1.96 a share for 2007, up from the $1.84 to $1.94 it forecast in April. Analysts expect earnings of $1.92 a share on $13 billion of revenue.

But the company lowered the upper end of its forecast for revenue per available room, saying it expects growth of 6% to 7% in North America. In April, Marriott predicted growth of 6% to 8%.

The lodging industry was shaken up this month by Blackstone Group’s $26-billion acquisition of Hilton Hotels Corp., leading to speculation that other hotel companies may be potential buyout targets. However, most analysts don’t think Marriott will be soldany time soon.