Earnings: Best Buy, Marriott, Aetna

Earnings: Marriott | Aetna | Best Buy |

Marriott Profit Rises On Demand, Rate Increases

NEW YORK (Reuters) - Marriott International Inc. (MAR), the top U.S. hotel operator, on Thursday reported a 25 percent rise in quarterly profit as strong demand allowed it to increase room rates.

Net income rose to $237 million, or $1.07 per share, from $189 million, or 79 cents a share, a year earlier. Analysts on the average were expecting 98 cents per share, according to Reuters Estimates.

Revenue increased 16 percent to $3.6 billion.

The Bethesda, Maryland-based company, whose brands include Ritz-Carlton and Courtyard as well as Marriott, has benefited as strong demand and limited growth in supply allowed hoteliers to raise room prices.

Revenue per available room, a key measure of the industry's health, rose 11.2 percent at Marriott's comparable worldwide systemwide properties.

Looking ahead, the company said it expected North American company-operated revenue per available room to increase 8 percent to 10 percent in 2006.

The company said it had suspended production at its four synthetic fuel facilities in mid-January, citing higher fuel prices and uncertainty about tax credits.

Excluding the impact of its synthetic fuel business, Marriott said it expected earnings per share of 67 cents to 73 cents in the first quarter and between $2.95 and $3.05 for the full year.

So far this year, Marriott shares have fallen about 1.3 percent, compared with a 2.3 percent decline for the Dow Jones U.S. hotels index.

Marriott's fourth quarter usually runs for 16 weeks.

Aetna Sees Profit Jump As Enrollment Increases

NEW YORK (Reuters) - U.S. health insurer Aetna Inc. (AET) Thursday posted a 41 percent jump in quarterly earnings on higher enrollment in its health plans, and raised its full-year profit targets, sending shares higher.

"Aetna's growth shows no signs of slowing," CIBC analyst Carl McDonald said in a research note, calling the results "solid."

Fourth-quarter net income rose to $423 million, or $1.42 per share, from $300.7 million, or 98 cents per share, in the year-earlier period.

Excluding items, Aetna reported earnings of $1.26 per share. Analysts, on average, expected $1.23, according to Reuters Estimates.

Membership in its medical plans rose by 105,000 to 14.8 million in the quarter. The insurer also said strong underwriting results and a tight grip on general and administrative expenses helped quarterly results.

Aetna raised its 2006 operating earnings forecast to a range of $5.57 per share to $5.63 per share from its previous range of $5.45 to $5.50.

Adjusted for stock-option expensing, the company forecast operating earnings of between $5.42 to $5.48 on a per share basis. Analysts expected the company to earn $5.46 per share in 2006.

Aetna also lifted its 2006 forecast range for medical membership growth by 100,000 to between 900,000 to 1 million.

The third-largest health insurer by market value, Aetna last month named its president, Ronald Williams, as chief executive. Investors are wondering if the leadership change will prompt Hartford, Connecticut-based Aetna to pursue acquisitions to keep pace with larger rivals WellPoint Inc. (WLP) and UnitedHealth Group Inc. (UNH).

Shares of Aetna rose $3.88, or 4 percent, to $100 in premarket trade on the Inet electronic brokerage system.

"We think Aetna's results will be more than enough to sustain the stock's recent strength," analyst McDonald said, adding the report should help boost other stocks in the sector.

Aetna shares rose 9.5 percent in the fourth quarter, outpacing a 7 percent increase for the Morgan Stanley Healthcare Payor Index during the period.

Best Buy Raises Outlook After Strong Sales

CHICAGO (Reuters) - Best Buy Co. Inc. (BBY) Thursday raised its quarterly profit forecast, sending its stock up 9 percent, as demand for flat-panel televisions, MP3 digital music players and gift cards drove better-than-expected sales.

The top U.S. consumer electronics retailer said it now expects profit in the range of $1.25 to $1.30 per share for the fiscal fourth quarter that ends Feb. 25. It had previously forecast earnings at the high end of its range of $1.06 to $1.16 per share.

Analysts, on average, expected $1.16 per share, according to Reuters Estimates.

The bright forecast comes after Best Buy posted disappointing third-quarter results in December, which it blamed on rising expenses.

The fourth quarter generates the biggest portion of Best Buy's full-year profit and includes the bulk of the holiday shopping season as well as the Super Bowl, U.S. football's widely watched championship game, which typically spurs demand for big-screen televisions.

Best Buy said its fourth-quarter profit forecast assumes 6 percent to 7 percent comparable-store sales growth for the quarter. That was well ahead of its initial forecast for 3 percent to 5 percent growth.

The retailer said January comparable-store sales rose by the low-double digits, driven by flat-panel televisions, MP3 players, notebook computers and video games.

Gift card sales were up 20 percent during the holiday shopping season, which also added to January's strong showing. Retailers record revenue from gift cards when they are redeemed, not when they are sold.

Best Buy had previously reported that December comparable-store sales rose 5.8 percent.

The retailer, based in Minneapolis, said price discounting was not as severe as expected, which helped boost profit. Analysts had been concerned that fierce competition from rivals such as Circuit City Stores Inc. (CC) and Wal-Mart Stores Inc. (WMT) would prompt more aggressive markdowns.

Best Buy also said it plans to open 90 new stores in the United States and Canada during the next fiscal year, and will continue remodeling existing stores to add new fixtures, expand product assortments and change the staffing model.

Shares of Best Buy jumped to $53.40 in premarket trading on the Inet electronic brokerage early Thursday, up from Wednesday's New York Stock Exchange closing price of $48.83.