U.S. Markets closed

Post Earnings Coverage as Marriott's Revenue Jumped 47%; Net Income Climbed 21%

Upcoming AWS Coverage on Hilton Worldwide Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 7, 2017 / Active Wall St. announces its post-earnings coverage on Marriott International, Inc. (NASDAQ: MAR). The Company announced its fourth quarter and fiscal 2016 earnings results on February 15, 2017. On September 23, 2016, Marriott completed its acquisition of Starwood Hotels & Resorts Worldwide (Starwood). The Hotel Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:

http://www.activewallst.com/register/

One of Marriott International's competitors within the Lodging space, Hilton Worldwide Holdings Inc. (NYSE: HLT), reported on February 15, 2017, its Q4 and full year 2016 result. AWS will be initiating a research report on Hilton Worldwide in the coming days.

Today, AWS is promoting its earnings coverage on MAR; touching on HLT. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

For the quarter ended December 31, 2016, Marriott's GAAP revenue jumped 47% to $5.46 billion compared to revenue of $3.71 billion in Q4 2015, and revenue numbers were above analysts' consensus of $4.96 billion.

For Q4 2016, Marriott's reported net income totaled $244 million, up 21% compared to Q4 2015 net income of $202 million. The Company's reported diluted earnings per share (EPS) were $0.62 in the reported quarter, a 19% drop from diluted EPS of $0.77 in the year-ago same quarter. The Company's Q4 2016 adjusted net income totaled $334 million, up 15% versus Q4 2015 combined net income of $291 million. The Company's adjusted diluted EPS in Q4 2016 totaled $0.85, up 20% compared to combined diluted EPS of $0.71 in the year-ago comparable quarter and also surpassed Wall Street's estimates of $0.84 per share for the reported quarter.

Key-Metrics

Marriott's Base management and franchise fees totaled $564 million in Q4 2016 compared to $373 million in the year ago corresponding quarter. Out of the $191 million y-o-y increase in fees, $174 million was related to Legacy-Starwood results in the quarter. The Company's Q4 2016 worldwide incentive management fees increased to $149 million compared to $81 million in the year earlier comparable quarter. The $68 million increase largely reflects Legacy-Starwood fees in the quarter.

Marriott's Owned, leased, and other revenue, net of direct expenses, totaled $169 million compared to combined revenue, net of expenses of $165 million in the year ago same quarter. The adjusted y-o-y increase largely reflects better results at owned and leased hotels, higher residential and credit card branding fees, partially offset by lower termination fees and the impact of Legacy-Starwood hotels previously sold.

The Company's Q4 2016 incentive management fees decreased to $149 million compared to combined fees of $150 million in Q4 2015. Despite a 70 basis point decrease in worldwide comparable Company-operated actual dollar RevPAR in the reported quarter, incentive fees were roughly flat due to higher property-level margins.

For Q4 2016, Marriott's adjusted EBITDA totaled $756 million, up 11% over Q4 2015 combined adjusted EBITDA of $682 million. The Company's FY16 combined adjusted EBITDA totaled $2.99 billion, a 9% increase over FY15 combined adjusted EBITDA of $2.74 billion.

Selected Performance Information

Combined information presented in this section assumes Marriott's acquisition of Starwood and Starwood's sale of its timeshare business had been completed on January 01, 2015.

During Q4 2016, Marriott added 116 new properties (22,043 rooms) to its worldwide lodging portfolio. Ten properties (2,450 rooms) exited the system during the reported quarter. At year-end, Marriott's lodging system encompassed 6,080 properties and timeshare resorts with nearly 1,191,000 rooms.

At year-end, the Company's worldwide development pipeline totaled 2,493 properties with more than 420,000 rooms, including 892 properties with roughly 161,000 rooms under construction and 218 properties with nearly 34,000 rooms approved for development, but not yet subject to signed contracts.

In Q4 2016, Marriott's worldwide comparable system wide constant dollar RevPAR increased 0.8%. The Company's North American comparable system wide constant dollar RevPAR increased 1.1%, and international comparable systemwide constant dollar RevPAR increased 0.2% for the same period. For FY16, Marriott's worldwide comparable combined systemwide constant dollar RevPAR increased 1.8%. North American comparable combined systemwide constant dollar RevPAR increased 2.3%, and international comparable combined systemwide constant dollar RevPAR increased 0.7%.

Balance Sheet

At year-end, Marriott's total debt was $8,506 million and cash balances totaled $858 million compared to $4,107 million in debt and $96 million of cash at year-end 2015.

The Company repurchased 4.3 million shares of common stock in Q4 2016 at a cost of $348 million at an average price of $80.11. For FY16, Marriott repurchased 8.0 million shares of its stock for $573 million at an average price of $71.55.

Outlook

For Q1 2017, Marriott expects comparable systemwide RevPAR on a constant dollar basis for the combined Company to increase 1% to 3% in North America and worldwide. The Company assumes Q1 2017 total fee revenue will total between $740 million to $750 million, flat to up 1% on a y-o-y basis. The Company estimates that incentive management fees will decrease roughly 10% on a y-o-y basis largely due to deferred fees recognized in the prior year, renovations, and timing. Marriott expects Q1 2017 owned, leased, and other revenue, net of direct expenses, could total $60 million to $70 million, a 19% to 30% decrease compared to combine Q1 2016 results of $86 million.

For FY17, Marriott anticipates gross room additions of 6% net. The Company assumes FY17 total fee revenue will total $3.18 billion to $3.25 billion. Marriott expects FY17 owned, leased, and other revenue, net of direct expenses, could total $345 million to $360 million, a 16% to 19% decline compared to combined 2016 results of $426 million. Marriott expects FY17 adjusted EBITDA could total $3.08 billion to $3.18 billion.

Stock Performance

On Monday, March 06, 2017, the stock closed the trading session at $86.72, marginally fell 0.08% from its previous closing price of $86.79. A total volume of 2.11 million shares have exchanged hands. Marriott International's stock price advanced 9.02% in the last three months, 23.34% in the past six months, and 27.76% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 5.25%. The stock is trading at a PE ratio of 32.31 and has a dividend yield of 1.38%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street