By SAMANTHA BOMKAMP, Associated Press
NEW YORK (AP) — Marriott International Inc. is betting that it can grow earnings this year through higher bookings and rates despite slowing growth overseas
The Bethesda, Md., hotel company raised its profit expectation for the full year but reined in its prediction for fees for extras like Wi-Fi. It also says demand growth is slowing in the Middle East and in Asia, where economic growth is weakening. It's particularly concerned about demand for higher-end hotels.
Worries about the wealthy cutting back on spending have surfaced in the last several months following warnings by luxury companies including jeweler Tiffany & Co.
Marriott made its prediction as it reported second-quarter net income that rose 6 percent from a year ago. 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.
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 $1.58, or 4.1 percent, to $37.12 in after-hours trading Wednesday. The stock closed down 14 cents at $38.03 in regular trading.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.