Marriott International Inc. yesterday reported that net income jumped 27 percent to $75 million in the second quarter, a performance that keeps the company on pace to shatter last year's record earnings.
The Bethesda-based lodging operator's earnings represent the latest evidence of robust hotel industry fundamentals such as average room and occupancy rates, a trend fueling lodging companies' desire to develop or acquire properties.
Marriott, for instance, added 41 properties containing 5,600 rooms in the second quarter, part of its larger plan to add $H 120,000 by the end of the decade.
"Ongoing expansion in each of our businesses is broadening our earnings base," Marriott International Chairman and President J. W. Marriott Jr., said in a prepared statement.
"Industry conditions are extremely favorable, and the strength of our brands gives us a clear competitive advantage. We are well on our way to surpassing last year's record performance."
In addition to adding properties, Marriott also has 50,000 rooms under development or in service in such places as Switzerland, South Korea, El Salvador and Costa Rica. In all, Marriott's portfolio now contains 1,100 properties with more than 218,000 rooms.
The hotel additions helped boost Marriott's gains in both the second quarter and first half of 1996. Most notably, Marriott International's revenues in the second quarter rose 11 percent to $2.35 billion.
In the first half of the year, Marriott generated net income of $138 JTC million, $1.02 per share, a 24 percent increase from 1995. Sales in the first six months totaled $4.5 billion.
In 1995, Marriott reported net profit of $247 million on revenue of $8.9 billion, the best annual performance in the company's nearly 70-year history.
But gains in all facets of its business also contributed to the improved earnings.
Although it declined to provide figures, Marriott said it posted gains in Marriott, Courtyard, Residence Inn, Fairfield Inn and Ritz-Carlton Hotels lodging brands, vacation resorts, food service and facilities management, and senior living communities.
In the lodging sector, the biggest segment of Marriott's business, the company also noted that operating profit increased because of franchise and incentive management fees.
"The fact that lodging operating profit was up 26 percent on a sales increase of 9 percent, I believe, is pretty healthy," said Michael L. Mead, a Legg Mason Wood Walker Inc. analyst who follows Marriott.
"It tells me management is focusing on what they should be focusing on."
Mead added the second-quarter earnings were three cents above Wall Street's consensus estimates.
Marriott's stock closed unchanged at $53 per share yesterday in unusually heavy trading.
Pub Date: 7/03/96