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Marriott International Inc. (MAR) has reported third quarter 2010 earnings of 22 cents per share, in line with the Zacks Consensus Estimate. Earnings were at the higher end of the company’s guidance of 18 cents to 22 cents, and recorded a substantial increase of 47% year over year.

The results were driven by further strengthening of corporate and leisure demand, resulting in a higher average daily room-rate. Total revenue summed up to $2.6 billion, up 40% year over year and also surpassed the Zacks Consensus Estimate of $2.5 million.

Inside the Headline Numbers
Base management and franchise fees increased 9% year over year to $253 million, backed by higher revenue per available room (RevPAR) and fees from new hotels. Incentive management fees spiked 24% from the year-ago quarter at $21 million. Owned, leased, corporate housing and other revenues fell 3% to $220 million, while adjusted Timeshare sales and services revenues rose 10% to $275 million.

The RevPAR for worldwide comparable company-operated properties grew 8.2% (up 7.5% on a constant-dollar basis).

International company-operated RevPAR upped 12.0% year over year (up 8.5% on a constant-dollar basis) with a 1.6% hike in average daily rate (down 1.6% using constant dollars). RevPAR was strongest in the Asia-Pacific region with a rise of 20.0%.

In North America, comparable company-operated RevPAR rose 7.2%, with average daily rate up 1.7%. RevPAR for comparable company-operated North American full-service and luxury hotels escalated 7.3%, driven by a 2.6% rise in average daily rate.

Worldwide comparable company-operated house profit margins were up 90 basis points (bps), driven by higher occupancy, slight rate increases and strong productivity.

General Administrative and other expense expanded 4% to $149 million and interest expense leaped 52% year over year to $41 million.

Update on Hotel Rooms
In the third quarter, Marriott opened 5,000 rooms including nearly 2,000 rooms in international markets. At quarter-end, Marriott’s pipeline of hotels under construction internationally, pending conversion or approved for development, added up to about 575 properties with approximately 95,000 rooms.

The company expects to open about 30,000 rooms in 2010 and 25,000 to 30,000 rooms in 2011.

At the end of third quarter 2010, total debt was $2,726 million and cash balances summed up to $223 million, compared with $2,298 million in debt and $115 million of cash at year-end 2009, respectively.

Marriott did not repurchase any shares in the reported quarter. The company also has no plans to repurchase shares in fiscal 2010. As of September 10, 2010, the remaining share repurchase authorization totaled 21.3 million.

For the fourth quarter, Marriott expects earnings of 33 cents to 36 cents on total fee revenue projection of $370 million to $380 million. Comparable system-wide RevPAR on a constant dollar basis is expected to increase 6% to 8% in North America and 7% to 9% outside North America.

For full-year 2010, Marriott expects its earnings guidance in the range of $1.09 to $1.12 per share on total fee revenue projection of $1.17 billion to $1.18 billion.

The company expects 2011 to be more promising than 2010, as strong demand and pricing continue. Comparable system-wide RevPAR on a constant dollar basis is expected to grow in the range of 6% to 8% in North America, outside North America and on a worldwide basis. Total fee revenue is expected to be in the range of $1,290 million to $1,330 million.