Marriott Profit Up 20%

(RTTNews) - Hotel operator Marriott International, Inc. (MAR) said Wednesday after the markets closed that its first quarter profit rose 20% from last year, driven by strong transient and group demand in the U.S. as well as robust demand in Mexico and its Caribbean resorts.

The company's quarterly earnings per share also came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast. At the same time, the company gave a downbeat earnings outlook for the current quarter, but maintained its full year 2015 earnings forecast.

Arne Sorenson, president and chief executive officer of Marriott International, said, "Worldwide constant dollar RevPAR increased at the high end of our expectations in the first quarter of 2015. Strong transient and group demand and very high occupancy rates in the U.S. allowed us to continue to reduce special discounts and enhance pricing. Internationally, robust demand in Mexico and our Caribbean resorts and increasing travel to Egypt drove RevPAR higher. Weak currencies in Europe, the U.K. and Japan encouraged both domestic demand and international arrivals into those markets. As a result, constant dollar RevPAR at our international hotels increased 6.7 percent, well ahead of our expectations."

Marriott shares are currently losing 1.63% in after hours trading after closing the day's regular trading session at $83.87, up $2.55 or 3.14%. The shares trade in a 52-week range of $57.00 to $85.00.

Marriott's RevPAR for worldwide comparable systemwide properties increased 6.8% in the first quarter, with North America comparable systemwide RevPAR up 6.9% and international comparable systemwide RevPAR up 6.7%.

The company's international hotels performed well in the first quarter, driven by robust demand in Mexico and its Caribbean resorts and increasing travel to Egypt.

Marriott added 60 new properties, or 10,148 rooms, to its worldwide lodging portfolio in the first quarter, and ended the quarter with 4,228 properties and timeshare resorts for a total of over 723,000 rooms.

The company's worldwide development pipeline totaled over 1,450 properties with over 240,000 rooms at quarter-end, including about 500 properties with 88,000 rooms under construction and 162 properties with nearly 27,000 rooms approved for development, but not yet subject to signed contracts.

For the first quarter ended March 31, 2015, the Bethesda, Maryland-based company reported net income of $207 million or $0.73 per share, compared to $172 million or $0.57 per share for the year-ago quarter.

The latest quarter results results include impairment charges totaling $12 million pretax while the prior year quarter included both a $10 million pretax impairment charge and a net $16 million tax benefit.

On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.70 share for the first quarter. Analysts' estimates typically exclude special items.

Total revenue for the first quarter rose 7% to $3.51 billion from $3.29 billion in the same quarter last year. Fourteen analysts had a consensus estimate of $3.59 billion for the first quarter.

Looking forward, the company forecasts earnings of $0.78 to $0.83 per share for the second quarter. The company still forecasts earnings of $3.00 to $3.12 per share for the full year 2015. Analysts currently expect the company to earn $0.83 per share for the second quarter and $3.08 per share for the full year 2015.

For the second quarter, the company expects comparable systemwide RevPAR on a constant dollar basis tol increase 5% to 7% in North America, 3% to 5% outside North America and 5% to 7% worldwide. The company's guidance for second quarter RevPAR growth reflects the shift of Ramadan, which will begin earlier in the second quarter this year.

For full year 2015, the company now expects comparable systemwide RevPAR on a constant dollar basis to increase 5% to 7% in North America, 4% to 6% outside North America and 5% to 7% worldwide. Previously, the company expected comparable systemwide RevPAR on a constant dollar basis to increase 5% to 7% in North America, 3% to 5% outside North America and 5% to 7% worldwide.

The company now expects net room additions of 7% worldwide for 2015, including the approximately 10,000 rooms associated with the recently completed acquisition of Delta Hotels, up from its prior expectations of 6%.

Earlier Wednesday, Hilton Worldwide Holdings Inc. (HLT) reported a 22% rise in first quarter profit, but gave a downbeat earnings forecast for the current quarter.