Ashley M. Heher
Earnings Preview: Marriott International Inc.
CHICAGO — Marriott International Inc. reports results for its fiscal third quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Earlier this month, Marriott said it would charge off $760 million for the third quarter as boosts cash flow by lowering prices and curbing timeshare development at its high-end resorts as demand shrinks for luxury real estate.
The company, whose hotel brands include Marriott, Renaissance and Ritz-Carlton, also will sell some undeveloped land. The Bethesda, Md.-based hotelier also plans to offer promotions and has cut back development in Europe.
Marriott said comparable revenue per available room, considered a key gauge for lodging companies, fell 19 percent in the third quarter at its properties in North America. But that was better than company’s earlier forecast of a 20 percent to 23 percent drop.
BY THE NUMBERS: Analysts polled by Thomson Reuters predict, on average, a profit of 13 cents per share on revenue of $2.39 billion for the quarter. Last year, the company earned $94 million, or 26 cents per share, and its revenue rose 1 percent to $2.96 billion.
ANALYST TAKE: Goldman Sachs analyst Steven Kent said he expects Wall Street to focus on how much Marriott is controlling its costs and expenses.
“We believe it is unlikely that Marriott will give guidance for its fiscal 2010,” Kent told investors in a research note. “However, we do believe the company could give further indications that business is starting to turn around.”
WHAT’S AHEAD: Analysts will be waiting to see what kind of forecasts the company offers about whether the hotel industry will begin to see bookings rebound as the recession winds down.
STOCK PERFORMANCE: During the quarter, which began June 20 and ended Sept. 11, shares climbed about 12 percent to end the period at $24.60. They closed Wednesday at $26.95 in the middle of a tight 52-week range of $26.66 to $27.32.
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