Marriott International Inc. experienced solid profit gains in its third quarter, brought about by the continuing economic recovery and the rebound of the nation's hotel industry.
The Bethesda-based lodging and management company posted earnings of $37 million, or 28 cents a share, on sales of $1.8 billion in the period ended Sept. 9. Profit increased 28 percent compared with the pro-forma figure generated in the same period of 1993. Excluding noncomparable items from 1993, earnings rose 48 percent.
The pro forma number is used to reflect comparable earnings prior to the split of the former Marriott Corp. last October, leading to the formation of Marriott International, manager of hotels, and Host Marriott Corp, owner of hotel real estate.
The Marriott International earnings resulted from measurable gains in virtually every segment of its business, including full-service lodging, contract services, senior living and food supply and distribution. The contract services segment saw the biggest growth, with an operating profit rise of 71 percent.
"Business was strong for all four of the company's lodging brands this summer which, coupled with minimal price discounting, resulted in solid room rate growth," said Marriott International Chairman and President J. W.. Marriott Jr. "And we expect to do well for the remainder of the year."
For the nine-month period ended Sept. 9, Marriott International generated net income of $128 million, or 96 cents a share, an increase of 22 percent from the same period a year ago. It reported sales advanced 4 percent to $5.7 billion.
"For a company of Marriott's size, it's an impressive performance," said Camille Humphries, an Alex. Brown & Sons Inc. analyst who tracks Marriott. "The whole industry is experiencing a recovery, and Marriott is really taking advantage of that trend. It's particularly noteworthy when considering that Marriott's growth previously has been led by its limited-service division such as Courtyard, but now its full-service line also is up, and that's important because that's the component which provides the most room for future growth."
Marriott International operates or has franchise agreements involving 830 hotels nationwide containing more than 177,000 rooms. Twenty-six properties were added in the third quarter. The company plans to add between 30 and 40 properties by year-end, although many of them involve smaller projects, said Marriott spokesman Robert T. Souers.