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Marriott (MAR) Q1 Earnings Miss, Revenues Beat Estimates

Zacks Equity Research

Marriott International, Inc. MAR reported mixed first-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Following the quarterly results, not much movement was witnessed in the company’s share price in the pre-market trading session.

Adjusted earnings of 26 cents per share lagged the Zacks Consensus Estimate of 84 cents. The bottom line declined 81.6% from the prior-year quarter. The company’s earnings in the quarter included impairment charges, bad debt expense, and guarantee reserves of $138 million after-tax (42 cents per share) owing to the coronavirus. 

Total revenues of $4,681 million beat the consensus mark of $4,059 million. However, the top line declined 7% on a year-over-year basis. Base management and Franchise fee came in at $214 million and $415 million, down 24% and 8% year over year, respectively.

At the end of first-quarter 2020, Marriott's development pipeline totaled roughly 3,050 hotels, with approximately 516,000 rooms. Further, nearly 230,000 rooms were under construction.

Marriott International Inc Price, Consensus and EPS Surprise

Marriott International Inc Price, Consensus and EPS Surprise

Marriott International Inc price-consensus-eps-surprise-chart | Marriott International Inc Quote

RevPAR & Margins

In the quarter under review, revenue per available room (RevPAR) for worldwide comparable system-wide properties fell 22.5% in constant dollars (down 22.7% in actual dollars) on account of 14.5% and 1.5% decline in occupancy and average daily rate (ADR), respectively. These metrics were impacted by the coronavirus pandemic.

Comparable system-wide RevPAR in North America fell 19.5% in constant dollars (down 19.5% in actual dollars) owing to a 1.8% decline in ADR and 12.4% decrease in occupancy.

On a constant-dollar basis, international comparable system-wide RevPAR slumped 30.4% (down 31.3% in actual dollars), owing to a 19.6% and 0.9% decline in occupancy and ADR, respectively.

Total expenses were down 1% year over year to $4,567 million, primarily due to decline in Reimbursed expenses.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $442 million, down 46% with the year-ago figure.

Coronavirus Impact

The coronavirus outbreak will hurt the company’s results in 2020. However, the company is unable to estimate any financial impact of the coronavirus outbreak at the moment as the duration and extent of the outbreak cannot be ascertained.

Zacks Rank & Peer Releases

Marriott currently carries a Zacks Rank #5 (Strong Sell).

Hilton Worldwide Holdings Inc. HLT reported first-quarter 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. The company’s adjusted earnings of 74 cents per share surpassed the Zacks Consensus Estimate of 45 cents but declined 7.5% on a year-over-year basis. Revenues totaled $1,920 million, which beat the consensus mark of $1,755 million. However, the reported figure declined 12.9% from the year-ago quarter. 

Hyatt Hotels Corporation H reported first-quarter 2020 results, wherein the bottom line matched the Zacks Consensus Estimate but the top line missed the same. The company reported adjusted loss per share of 35 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had reported adjusted earnings per share of 45 cents. Total revenues were $993 million, which lagged the Zacks Consensus Estimate of $1,025 million and declined19.9% from the year-ago quarter.

Extended Stay America, Inc. STAY reported first-quarter 2020 results, wherein earnings and revenues beat the Zacks Consensus Estimate. However, both the top and the bottom lines fell on a year-over-year basis, owing to a decline in comparable company-owned RevPAR on account of the coronavirus outbreak. During the first quarter, adjusted earnings of 7 cents per share beat the Zacks Consensus Estimate of 4 cents by 75%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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