Marriott Meets Expectations, Stock Inches Higher Overnight

From Bethesda, Md., after the market closed Wednesday, resort hotel chain Marriott International (MAR) reported earnings that were in-line with estimates, which inched the stock higher overnight but down about 4 percent in early Thursday trading. However, the news was positive overall.

While the revenue of $2.8 billion for the quarter was consistent with predictions, the amount is down more than 5 percent year over year, which is a concern. However, the earnings per share of 42 cents was also consistent with analysts’s predictions and was a 24 percent increase over the same period in 2011, according to the company’s press release. Gross earnings in the quarter totled $289 million, which was 13 percent higher than in the second quarter of 2011. The company reported a repurchase of 10.5 million shares of common stock during the quarter and the opening of more than 5,000 new rooms during the quarter with about 115,000 rooms in the pipeline for future opening.

Overall, the report seems to carry some positive news for hedge funds like Jeffrey Vinik’s Vinik Asset Management and Steven Cohen’s SAC Capital Advisors. Vinik was invested to the tune of nearly $113 million at the end of March and had boosted its share hold by 150 percent in the first quarter of 2012, while SAC increased its hold by more than 1,100 percent in the first quarter to nearly $35 million.

In a press release, CEO Arne M. Sorenson said, “In the second quarter, our business performed well in most markets around the world.  In North America, strengthening group business, more travel by our special corporate customers, especially in the technology and consulting industries, and the impact of modest supply growth, drove our occupancy and room rates higher. Property-level revenues from group customers at comparable Marriott brand hotels increased 8 percent in the second quarter with banquet revenue up 7 percent.  Special corporate revenue also increased 8 percent during the quarter. With robust group bookings in North America, including Washington, D.C., we expect strong REVPAR and room rate growth in the second half of the year.  In fact, group revenue on the books is up 10 percent for the second half of 2012 and up 8 percent for 2013.  We are targeting high single-digit percentage increases in special corporate rates for 2013.”