Marriott (MAR) Q2 Earnings Miss Estimates, Revenues Surpass

Marriott International, Inc. MAR reported second-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. However, the top and the bottom line declined on a year-over-year basis.

In the quarter under review, Marriott’s adjusted loss per share came in at 64 cents, wider than the Zacks Consensus Estimate of a loss of 44 cents. In the prior-year quarter, the company reported adjusted earnings of $1.56 per share. Adjusted loss in the quarter included impairment charges and bad debt expense of 19 cents and 17 cents per share, respectively, thanks to the coronavirus pandemic. Following the results, the company’s shares declined 2.7% in pre-market trading session.

Quarterly revenues of $1,464 million beat the consensus mark of $1,392 million by 5.2%. However, the top line declined 72% on a year-over-year basis. Base management and Franchise fee came in at $40 million and $182 million, down 87% and 65% year over year, respectively.

RevPAR & Margins

In the quarter under review, revenue per available room (RevPAR) for worldwide comparable system-wide properties fell 84.4% in constant dollars (down 84.6% in actual dollars) due to 57.4% and 35.3% 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 83.6% in constant dollars (down 83.6% in actual dollars) thanks to 34.7% decline in ADR and 58.4% fall in occupancy.

On a constant-dollar basis, international comparable system-wide RevPAR slumped 86.7% (down 87.1% in actual dollars) due to a 54.9% and 37.7% decline in occupancy and ADR, respectively.

Total expenses fell 67% year over year to $1,618 million, primarily due to decline in Reimbursed expenses.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $61 million, down 94% year over year.

Balance sheet

At the end of the second quarter, Marriott's total debt was reported at $11.8 billion, compared with $10.9 billion in Dec 2019.

During the quarter, the company’s cash balances totaled $2.3 billion compared with $225 million in Dec 2019.

Owing to uncertainty revolving around the crisis, the company temporarily suspended its share repurchase programs and dividend payouts.

Unit Developments

At the end of the second-quarter 2020, Marriott's development pipeline totaled nearly 3,000 hotels, with approximately 510,000 rooms. Further, nearly 230,000 rooms were under construction.

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 #4 (Sell).

Hilton Worldwide Holdings Inc. HLT reported second-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. The company’s adjusted loss per share came in at 61 cents, wider than the Zacks Consensus Estimate of a loss of 34 cents. In the prior-year quarter, the company reported adjusted earnings of $1.06 per share. Total revenues of $564 million, lagged the Zacks Consensus Estimate of $597 million and declined 77.3% from the year-ago quarter’s levels.

Hyatt Hotels Corporation H reported second-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. The company reported adjusted loss per share of $1.80, wider than the Zacks Consensus Estimate of a loss of $1.38. In the prior-year quarter, the company had reported adjusted earnings per share of 76 cents. Total revenues of $250 million lagged the Zacks Consensus Estimate of $251 million and declined 80.6% from the year-ago quarter’s level.

Choice Hotels International, Inc. CHH reported second-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The company reported adjusted earnings of 13 cents per share, which missed the consensus mark of 28 cents by 53.6%. Also, the bottom line dropped 89% from the prior-year number. Revenues totaled $151.7 million, beating the consensus mark of $149 million by 1.6%. However, the reported figure declined 52% from the year-ago quarter’s figure.

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

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Click to get this free report Marriott International, Inc. (MAR) : Free Stock Analysis Report Choice Hotels International, Inc. (CHH) : Free Stock Analysis Report Hyatt Hotels Corporation (H) : Free Stock Analysis Report Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research