Shares of Host Marriott ( HMT) soared nearly 5% Wednesday after the company beat Wall Street's bottom- and top-line growth expectations, reinstated its dividend and raised guidance for the rest of the year.

The nation's largest lodging real estate investment trust announced that net income came in at $17 million, or 2 cents a share, a reversal from the $14 million, or 9 cents a share, that it lost last year.

Funds from operations, or FFO, which measures the cash flow generated by the company and is more closely watched by Wall Street, came in at 21 cents a share, down from 22 cents a share last year. Excluding all charges, Host Marriott's FFO would have been 30 cents a share, topping the 28-cent estimate.

In reaction, shares of the REIT rose 60 cents to $13.38.

Revenue came in at $927 million, up 12% from $828 million a year ago, and much better than the $888.2 million expected by analysts. Revenue per available room, a key metric of industry performance, grew 8.8% year-over-year, driven in part by a 1.1% increase in the average daily room rate and a 5.1 percentage point increase in occupancies.

"Strengthening demand has accelerated our revpar growth, leading to earnings results which exceeded our expectations," said Christopher Nassetta, president and CEO. "Our leading indicators continue to suggest we are in the early stages of a strong recovery, and that we should continue to see positive results throughout the remainder of the year and into 2005."

Indeed, the company boosted 2004 guidance based on the expectation that revpar would increase between 6% and 8% in the third quarter and between 5.5% and 7% for the full year. As a result, Host Marriott said that FFO, including charges, will come in between 9 cents and 11 cents a share in the third quarter and between 70 cents and 76 cents for the full year.

Excluding charges, the company said FFO would range between 10 cents and 12 cents a share in the third quarter, topping the 8-cent Wall Street estimate. For the fiscal year, FFO will range between 85 cents and 91 cents a share, better than the current 86-cent estimate.

With Host Marriott generating more cash than expected, the company plans to return the wealth to shareholders, announcing that it will pay a dividend between 4 cents and 6 cents a share in the fourth quarter and will reinstate its quarterly dividend program in fiscal 2005.

Marriott International ( MAR) last week kicked off the industry's second-quarter earnings season with a blowout quarter, topping Wall Street expectations by 6 cents a share and boosting guidance for the rest of the year because of rising travel demand.

Marriott announced net income of $160 million, or 67 cents a share, crushing the 61-cent Wall Street estimate and rising 27% from $125 million, or 51 cents a share, a year ago.

Industry leader Starwood Hotels & Resorts ( HOT) reports results Thursday. Its share price hit a 52-week high of $46.65 a week ago.