What caused the significant decrease in net income compared to the prior year?

The decrease in net income was primarily driven by a $43 million decline in Timeshare sales and services revenue, lower gains and other income of $32 million, and a $15 million increase in general, administrative, and other expenses. These factors were not fully offset by improvements in other segments.

How is the U.S. economic slowdown impacting Marriott's business?

The U.S. economic slowdown has led to less robust leisure demand, although business transient demand remained stronger, varying by industry. Luxury, international, and full-service properties showed stronger demand globally compared to limited-service properties.

What is the status of the discontinued synthetic fuel business?

The synthetic fuel business has been shut down and is now reported as a discontinued operation. It contributed $18 million in income in the first quarter of 2007 but had no significant revenue or profit in the first quarter of 2008.

What are the company's plans for future growth?

Marriott plans to continue growing through new property openings, with approximately 30,000 rooms (excluding residential units) expected to open in 2008. The company also maintains a development pipeline of over 130,000 rooms and continues its share repurchase program.

MAR 10-Q Quarterly Report Q1 FY2008 — Revenue, Net Income, EPS

Summary

Marriott International, Inc. (MAR) reported its first-quarter results for the period ending March 21, 2008. Total revenues increased by 4% to $2.95 billion, driven by system-wide growth and increased room rates, particularly in international markets. However, net income decreased significantly to $121 million from $182 million in the prior year's quarter, translating to diluted earnings per share of $0.33, down from $0.44 in Q1 2007. This decline was primarily attributed to a substantial drop in Timeshare sales and services revenue, lower gains and other income, and increased general, administrative, and other expenses, which were not fully offset by growth in fees and international segment performance. The company noted stable worldwide lodging demand, with stronger performance in international markets compared to a softening U.S. leisure demand due to economic slowdown. Despite the decrease in net income, Marriott continued to expand its portfolio, opening 5,948 new rooms in the quarter and maintaining a robust development pipeline. The company also continued its share repurchase program. Investors should note the impact of the discontinued synthetic fuel business, which contributed positively in the prior year but is now a non-operating item.

Key Highlights

1Total revenues grew 4% to $2.95 billion, driven by system-wide growth and increased room rates.
2Net income decreased by 33% to $121 million, leading to a 25% drop in diluted EPS to $0.33.
3Timeshare sales and services revenue declined significantly, impacting overall profitability.
4International lodging segment showed strong RevPAR growth of 10.0% for comparable company-operated properties.
5North American comparable company-operated properties saw a 2.3% increase in RevPAR, while U.S. leisure demand softened.
6The company opened 5,948 new rooms in the quarter and has over 130,000 rooms in its development pipeline.
7Share repurchases continued, with 6.2 million shares bought back in the quarter.

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q1 Ended Mar 21, 2008

Summary

Key Highlights

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