Updated from 9:58 a.m. EDT

Marriott International's ( MAR) strong third quarter and bullish guidance appeared to encourage lodging investors who've grown jittery about high gasoline prices and recent hurricanes.

The Washington-based company reported net income of $149 million in the quarter ended Sept. 9, up 12% from $133 million a year earlier. On a per-share basis, net income was 65 cents a share in the latest quarter, vs. 56 cents a year before.

The latest results, reported Thursday, included a $17 million noncash impairment charge related to an investment in an aircraft lease with Delta Air Lines TICKER TYPE="EQUITY"SYMBOL="DAL" EXCHANGE="NYSE" PRIMARY="NO"/>, which filed for bankruptcy protection last month.

Excluding that item, EPS in the latest quarter was 70 cents, easily topping the 64-cent average analyst estimate from Thomson First Call.

In reaction, Marriott shares rose by as much as 3.0%. Late in the session, they were up 70 cents, or 1.1%, at $63.87. Shares of Host Marriott ( HMT), the nation's largest lodging real estate investment trust and an owner of many Marriott-managed hotels, rose 40 cents, or 2.4%, to $17.03.

Marriott rival Starwood Hotels and Resorts ( HOT) gained $1.19, or 2.1%, to $58.90,

Host Marriott plans to report its third quarter next Wednesday, and Starwood reports Oct. 26.

Marriott's third-quarter revenue totaled $2.71 billion, up 18% from $2.30 billion a year earlier.

The results were boosted by higher room rates. Marriott said revenue per available room, a key lodging industry metric also known as revpar, jumped 8.8% at comparable North American hotels from the same period last year. That was driven by a 7.9% increase in the average room rate and a nearly 1 percentage-point rise in room occupancy to 75.9%.

"Rarely have we seen a more favorable pricing climate for our industry," said J.W. Marriott Jr., the company's chairman and CEO. "In the third quarter, North American group meeting attendance exceeded meeting planner expectations, and food and beverage revenue accelerated. Transient demand was strong in most markets around the world. Hotel supply growth, on the other hand, remained modest."

Looking ahead, Marriott expects North American revpar to rise 8% to 10% during the fourth quarter. Fourth-quarter earnings will likely be 95 cents to 98 cents a share, including 12 cents from the company's synthetic fuel business. That forecast is better than the 93-cent analyst consensus.

In 2006, Marriott expects North American revpar growth of 7% to 9%, a number several Wall Street analysts described as encouraging because it's well-ahead of investor expectations.

Marriott also predicts 2006 EPS of $3 to $3.10, excluding contributions from its synthetic fuel business. The Thomson First Call consensus is for a profit of $3.50, but analyst estimates likely include synthetic fuel profits.

Even though the outlook for the company's lodging operations is fairly clear, it's getting cloudy for the synthetic fuel business, which generates big tax credits. The credits begin to phase out if crude oil prices reach certain levels calculated by the government.

Marriott executives said this was unlikely during the fourth quarter, but they're refraining from predicting what the company might earn from synthetic fuel next year.