NEW YORK (AP) — Marriott International Inc. said Wednesday that its second-quarter net income rose 6 percent on higher bookings and rates, despite a revenue decline due to the spin-off of its timeshare business.
The Bethesda, Md., hotel company also raised its earnings expectations for the full year but predicts lower revenue from fees and weaker-than-expected growth in Europe and Asia, where the economy has slowed. Shares fell about 4 percent after the results were released.
Marriott, which also operates Ritz-Carlton hotels, Fairfield Inn & Suites and other lodging brands, earned $143 million, or 42 cents per share, in the 12 weeks that ended June 15, compared with $135 million, or 37 cents per share, a year earlier.
Revenue slipped 7 percent to $2.78 billion. Marriott had $564 million in revenue from its time-share business in the second quarter of 2011. That unit was spun off in November.
The company's profit matched Wall Street's estimate but revenue fell short of the expected $2.83 billion, according to FactSet.
Marriott's results improved worldwide despite slowing economic growth. Revenue per available room rose 6.7 percent. It expects that metric — a key measure of performance for hotel companies — to grow 6 to 8 percent this year.
Still, it said markets in the Middle East and Asia are seeing softer demand, especially in luxury hotels. Demand at higher-end properties held up the longest in the recession, but their recovery has been the slowest. Marriott also expects slightly lower revenue from fees this year. That includes charges for extras like Wi-Fi and parking.
The company now predicts profit of $1.65 to $1.75 per share for all of 2012. Analysts expect $1.65. Three months ago, Marriott forecast earnings between $1.58 and $1.69 per share.
Marriott will offer more details on its financial performance and forecast for the year in a conference call with analysts Thursday morning.
The stock lost $1.50, or 3.9 percent, to $37.20 in after-hours trading Wednesday.