The locally based firm, which is relocating from headquarters in Fort Lauderdale to Spartanburg, SC, is reporting an adjusted net gain of 23 cents per share, a penny more than the market forecast, which matches the EPS the company reported for the same period in 2000.
Including income taxes, cost of an extraordinary item and cumulative effect of accounting charges, the company is reporting a net income gain of $12.98 million, or 14 cents per share, on revenue of $145.7 million for the three-month period, compared with net of $22.7 million, or 23 cents per share, on total revenue of $142.2 million for the same period in 2000.
Announcement of the earnings report comes as the company closed the quarter ended Sept. 30 with a 77% overall average occupancy rate--an 8.5% decrease from the rate reported for the same period in 2000. Revenue per available room also dropped 6.9% for the quarter.
"The Company believes that the declines in occupancy experienced in the third quarter are less than those experienced in the overall lodging industry and are a result of the slowing U.S. economy and a reaction to the terrorist attacks of September 11," according to a shareholder's report released Oct. 22.
If current trends hold true, the company advised it could face an eventual 13% to 14% decline in RevPar for the year. That could push fourth-quarter EPS into the range of 9 to 11 cents per diluted share. If demand improves, however, the company advised it could be facing a decline in RevPar of only 4% to 6%.
"Despite the slowing of the U.S. economy and the terrible events of Sept. 11, our business remains very profitable at current occupancy rates," says George D. Johnson Jr., Extended Stay chief executive officer.
"The current situation will undoubtedly result in a severe contraction of capital for new hotel development. This contraction in capital and supply of new hotel rooms places us in an excellent position to benefit from expected increases in demand as our country recovers from the issues that currently confront us."
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