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Choice Hotels Q3 Beats Expectations

SILVER SPRING, MD-Hotel occupancy rates have been sliced in half in some major markets and analysts have said that financing for building or buying lodging properties has all but disappeared. Choice Hotels, however, reports earnings of 45 cents a share, beating the street.

By Marlon Millner | Updated on October 22, 2001

SILVER SPRING, MD-Choice Hotels reports net income for the third quarter of 45 cents a share, compared with 37 cents a share for the same period a year ago. The hotel frachisor says it beat expectations for the quarter ended September 30 by four cents a share. However, Zacks Investment Research Inc. indicates that three analysts show a mean estimate of 43 cents share, which the company still beat by 2 cents.

In a statement, company president and chief executive Charles Ledsinger Jr. says Choice Hotels is less susceptible to economic cycles than the company’s owner-operator competitors. “While the long-term effects of the aftermath of September 11 are not yet known, we expect our brands and hotels to be less sensitive to the overall industry decline, given our franchise structure and hotel locations,” says Lesinger. But Choice Hotels is not totally protected. The company expects earnings per share to be in a range of 27 cents to 31 cents a share for the fourth quarter, below a consensus estimate of 35 cents, according to Zacks. Moreover, the company has lowered its 2002 estimate to $1.31 to $1.37 a share; versus the mean estimate of $1.45 a share.

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