Updated at 3:39 p.m., Thursday, April 19, 2007
Marriott shares fall after company cuts growth forecast
Associated Press
WASHINGTON — Shares of Marriott International Inc. fell today after the hotel operator lowered growth expectations for a key revenue metric.The company, which reported a near tripling of its first quarter profit, scaled back its full-year growth forecast for revenue per available room, or revpar. Marriott, which operates nine hotels in Hawai'i, expects revpar to grow 6 percent to 8 percent in 2007, down from earlier estimates of 7 percent to 9 percent.
"We are taking a bit more conservative outlook for 2007," Chief Financial Officer Arne Sorensen said in a conference call. Industrywide growth in revpar is expected to moderate, Sorensen added.
Thomas Weisel Partners LLC analyst Jake Fuller said "this is our first real confirmation of a slowdown" in the lodging industry.
Marriott shares fell $3.61, or 7 percent, to $48.26 in afternoon trading on the New York Stock Exchange. The stock has traded between $34.30 and $52 over the past 52 weeks.
In the first quarter, the company said its first-quarter profit nearly tripled on growth in revpar and increased revenues. Net income for the quarter ended March 23 jumped to $182 million, or 44 cents per share, versus $61 million, or 14 cents per share, during the same period in the previous year.
Revenue for the quarter grew to $2.9 billion, up 7 percent from $2.71 billion a year ago.
Excluding its synthetic fuel business, adjusted earnings from continuing operations were 40 cents per share.
Analysts surveyed by Thomson Financial, who generally exclude synthetic fuel results from their forecasts, were looking for a profit of 38 cents per share.
