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Marriott International Profit Tops Estimates

Wednesday, 05 Oct 2011 06:47 PM

Marriott International Inc's third-quarter profit beat market expectations as uncertainty in the global economy failed to put a dent in corporate travel.

The company also gave investors their first read of demand into 2012, saying earnings could total $1.48 to $1.68 a share assuming worldwide systemwide revenue per available room (RevPAR) growth of 3 to 7 percent.

"The 2012 outlook is like a splash of cold water but not totally unexpected," Sanford Bernstein analyst Janet Brashear told Reuters.

"It's a much lower revPAR ... and I think investors were largely expecting that number, but it's not reflected in the consensus earnings number, so expect estimates will come down and people will be modestly less positive in their target prices," Brashear said.

"You could almost drive a truck through that in terms of just how much uncertainty they have in terms of what next year is going to look like," Morningstar analyst Chad Mollman said referring to the company's 2012 revPAR outlook range.

Mollman said the company's 2012 outlook was driven by macro-economic factors and he expected other hotel companies to also be cautious in their forecasts for next year.

Marriott, which runs Marriott, Residence Inn and Ritz-Carlton hotels, posted a quarterly net loss of $179 million, or 52 cents a share, compared with a profit of $83 million, or 22 cents, last year.

Excluding items, the company reported a profit of 29 cents a share, beating analysts' expectations for earnings of 27 cents a share.

RevPAR, a key industry benchmark that multiplies occupancy rate by room rate, was up 8.7 percent using actual dollars in the quarter for the company's hotels worldwide.

"Despite continued economic uncertainty, revenue per available room growth was very strong and adjusted EPS rose 32 percent," Chief Executive J.W. Marriott, Jr. said in a statement.

Last month, InterContinental Hotels Group Plc, home to the Crowne Plaza, Holiday Inn and InterContinental brands, said its trading momentum was good in August and September and it had not seen any significant impact from global recession fears and mounting debt concerns in the United States and Europe.

CEO J.W. Marriott said the spin-off of Marriott's timeshare business was on track and the company expected to close the transaction in the fourth quarter.

Shares of the company closed at $28.18 on Wednesday on the New York Stock Exchange.

© 2017 Thomson/Reuters. All rights reserved.

 
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Marriott International Inc's third-quarter profit beat market expectations as uncertainty in the global economy failed to put a dent in corporate travel. The company also gave investors their first read of demand into 2012, saying earnings could total $1.48 to $1.68 a...
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Wednesday, 05 Oct 2011 06:47 PM
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