"We believe that the REVPAR increase of 5.7% for comparable hotels outpaces the performance of the overall lodging industry and other lodging products in the economy price segment," George D. Johnson Jr., Extend Stay chief executive officer, says in a prepared statement. "Despite concerns about short-term economic conditions in the U.S., we believe that our products are positioned to continue to outperform the general lodging industry."

Investors reacted strongly to the announcement of the fiscal performance, pushing the price per share in Extended Stay up 70 cents by the close of trading yesterday on the New York Stock Exchange. Shares closed Tuesday at $16.10 on volume of 349,400, while the issue closed down 41 cents on Monday at $15.40 on volume of 72,500.

During the quarter, the Fort Lauderdale company added eight new hotels to a total portfolio of 400, an investment of about $2.2 billion. Over the remainder of the year, the company expects to open two hotels in the second quarter, three hotels in the third quarter and 15 in the fourth quarter at a total investment cost of about $250 million.

Forecast to earn 13 cents a share, the company reported net income of $16.6 million, or 17 cents per diluted share, on revenue of $134 million for the three months ended March 31. Net income for the quarter totaled $17.2 million, excluding a nonrecurring accounting charge. In comparison, net income totaled $11.3 million, or 12 cents a share, on revenue of $114 million for the same period in 2000.