(Marriott earnings article updated with commentary.)
BETHESDA, Md. (
(MAR - Get Report) topped fourth-quarter profit expectations with a 21.9% jump in adjusted quarterly earnings.
Hotel operator Marriott International posted adjusted profits per share of 39 cents, up from 32 cents in the year-earlier period. Analysts' consensus had been for Marriott to earn 36 cents per share.
Marriott shares jumped 2.8% in morning trading Tuesday amid heavy trading. Around 2 million shares were already in play just an hour into the day's trading session compared with their average daily volume of 2.6 million.
Investor enthusiasm reflected the earnings beat as well as word from Marriott that it would split itself into two separate, publicly traded companies.
"Marriott International expects to spin off its timeshare operations and development business as a new independent company through a special tax-free
to Marriott International shareholders in late 2011," the company said.
After the special dividend, the Marriott family is expected to hold approximately 21% of the outstanding common stock of each company.
Hudson Securities analysts Robert LaFleur said that "at first blush we like the concept" of Marriott spinning off its timeshare business, "but we will need to see more details."
"The Street must really like the spinout, because the quarter was OK, but not great. Conceptually, we like the spinout idea and think it sets in motion the possibility of similar moves by other operators like
Starwood Hotels & Resorts Worldwide
(HOT - Get Report)
(WYN - Get Report)
who have big timeshare operations," LaFleur wrote.