Marriott International, Inc. (MAR) opened the hoteliers' third quarter earnings season this Thursday.
During the second-quarter analysts' call in July, Marriott said it expects third-quarter adjusted earnings from continuing operations attributable to Marriott shareholders of $0.09-$0.14 per share. However, the company said last month that it expects pre-tax non-cash impairment charges of about $760 million related to its timeshare segment to impact its third-quarter results. The company booked the charge due to the difficult business conditions that its timeshare, luxury fractional, and luxury residential real estate development businesses continue to experience. The company intends to reduce prices and continue development at luxury fractional and residential resorts to accelerate cash flow.
Last month the company also said that third quarter comparable systemwide revenue per available room (RevPAR) in North America could decline by about 19%, compared to 20%-23% decline announced previously. For comparable systemwide hotels outside North America, the company expects RevPAR declines of 22%-24% on a constant dollar basis.
Analysts' estimates for the quarter ending September 2009 range from a low of $0.07 to a high of $0.199, with a consensus of $0.129. The consensus EPS forecast has decreased over the past week from $0.131 to $0.129 (-1.53%) and remained the same over the past month at $0.129. Of the 23 analysts making quarterly forecasts, 4 raised and 1 lowered their forecast.
In the last two quarters, the company has managed to surprise the investors by reporting higher earnings than the market's consensus.
The third quarter earnings season has been generally upbeat so far. I expect the company to announce a similar uptrend. I was expecting the company to surprise analysts in the current quarter as well, and it did. The company reported an EPS of $0.15 before restructuring charges. The hotelier reported a third-quarter net loss of $469 million, or $1.31 per share, hurt by a restructuring costs and a $752 million charge related to its timeshare segment. Revenues were $2.5 billion for the third quarter.
For the fiscal year ending December 2009, the consensus EPS forecast has increased over the past week from $0.822 to $0.823 (0.12%) and increased over the past month from $0.814 to $0.823 (1.11%). Of the 20 analysts making yearly forecasts, 7 raised and 1 lowered their forecast.
Currently, the stock is trading at $26.95, compared to the 52 week range of $11.79-$27.79. The stock seems to be overvalued by 10% at the current levels.
