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Marriott to spin off timeshare business

Marriott International Inc. is splitting into two publicly traded companies.

The Bethesda-based company said as it reported on its earnings Monday that it will spin off its timeshare development and management company later this year. The remaining business will concentrate on its lodging management and franchising business.

Marriott said the move will help both companies focus on opportunities in their respective industries.

It also helps the hotel chain shed the less-profitable timeshare business. Marriott will continue to receive franchise fees from the timeshare company’s use of the Marriott and Ritz-Carlton brands.

The company said day-to-day operations should not be affected by the transaction, it does not expect the decision to result in any job cuts and it doesn’t anticipate cutting its shareholder dividend.

The Marriott family will hold a roughly 21 percent stake in each company. Shares of the timeshare business, which had revenue of about $1.5 billion last year, will be distributed to Marriott shareholders as a tax-free dividend by the end of this year, the company said in a statement.

Stephen P. Weisz, president of Marriott’s timeshare business since 1997, will become CEO of the new company. William J. Shaw, who recently announced his retirement as vice chairman of Marriott International and resigned from its board, will be chairman of the new timeshare company’s board.

The company reported a 63 percent increase in its fourth-quarter net income to $173 million, or 46 cents per share. That’s up from $106 million, or 28 cents per share, a year earlier.

Excluding one-time impairment charges and other special items, Marriott earned 39 cents per share, up from 32 cents per share.

Marriot’s total revenue rose to $3.6 billion from $3.4 billion.

Analysts anticipated adjusted earnings of 36 cents per share and revenue of $3.58 billion, according to data from FactSet.

The company’s worldwide revenue per available room, a key industry metric, increased more than 8 percent in the fourth quarter as demand and pricing continued to strengthen.

Shares of Marriot rose $1.40, more than 3 percent, to $43 in after-hours trading.

Marriott said it expects to earn $1.35 to $1.45 in the current fiscal year. Analysts on average expect $1.41 per share.

Marriott International will continue to be listed on the New York Stock Exchange, and the company expects the new timeshare business also to list there. The new timeshare company does not expect to pay a quarterly cash dividend or be investment-grade in the near term.

The company is hosting a conference call Tuesday to discuss the news with investors.

Bloomberg contributed to this article.