Don't ever say the synthetic fuel and lodging industries don't mix. Hotel operator

Marriott International's

(MAR) - Get Report

first-quarter earnings jump was sparked in part by its strong synthetic fuel business.

Washington-based Marriott said Thursday that it earned $116 million, or 48 cents a share, compared with $82 million, or 32 cents a share, in the prior-year quarter. Excluding discontinued operations, the company earned 36 cents a share. Analysts had expected 36 cents a share.

TheStreet Recommends

The company said its synthetic fuel operations contributed an after-tax amount of about $19 million, or 8 cents a share, during the quarter, compared with $2 million, or a penny a share, it added in the year-ago quarter. In order to receive a federal clean-air tax credit, Marriott has several operations that produce cleaner-burning coal.

"Although the lodging industry felt the negative effects of the soft global economy compounded by the war in Iraq in the first quarter, Marriott continued to benefit from its business model and strong balance sheet," said J.W. Marriott Jr., chief executive of Marriott.

Revenue was $2 billion, up from $1.8 billion in the prior-year quarter. Revenue per available room decreased 1.5%, driven by lower average room rates, the company said. The company also said it added 35 hotels and 8,028 rooms, 35% of which were conversions of existing hotels to one of its existing brands.

Looking to the second quarter, Marriott expects EPS of 46 cents to 49 cents, including 9 cents a share from the company's synthetic fuel operations. The company earned 50 cents a share in the second quarter of 2002. Analysts expect 48 cents a share. The company estimates total lodging profit will be $180 million to $190 million, down slightly from the 2002 second quarter.

For the third quarter, Marriott expects to earn 30 cents to 34 cents a share, and for the fourth quarter, it estimates 64 cents to 68 cents a share. Under these assumptions, the company estimates 2003 EPS, including synthetic fuel, will be $1.76 to $1.87 a share. Previously, the company had expected $1.85 to $1.95 a share. Analysts expect $1.82 a share for the full year.

Shares of the company were down 1.42% in morning trading to $35.43 on the news.