Marriott International, Inc. (MAR - Free Report) reported third-quarter 2020 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. However, both the top and bottom lines declined on a year-over-year basis. Following the results, the company’s shares declined 1% in pre-market trading session.
In the quarter under review, Marriott’s adjusted earnings per share was 6 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.47 per share. Although the coronavirus pandemic continues to hurt the company’s results, it is witnessing rise in demand globally. The company stated that Greater China has been leading the recovery.
Quarterly revenues of $2,254 million missed the consensus mark of $2,395 million. Moreover, the top line declined 57.3% on a year-over-year basis. Base management and Franchise fee were $87 million and $279 million, down 70% and 47% year over year, respectively.
RevPAR & Margins
In the quarter under review, revenue per available room (RevPAR) for worldwide comparable system-wide properties fell 65.9% in constant dollars (down 65.9% in actual dollars) due to 40.8% and 26.4% 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 65.4% in constant dollars (down 65.4% in actual dollars) due to 27.6% decline in ADR and 40.3% fall in occupancy.
On a constant-dollar basis, international comparable system-wide RevPAR slumped 67.4% (down 67.3% in actual dollars) due to decline of 43.5% and 25.5% in occupancy and ADR, respectively.
Total expenses fell 57% year over year to $2,002 million, primarily due to decline in Reimbursed expenses.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $442 million, down 46% year over year.
Marriott International, Inc. Price, Consensus and EPS Surprise
Marriott International, Inc. price-consensus-eps-surprise-chart | Marriott International, Inc. Quote
Balance sheet
At the end of the third quarter, Marriott's total debt amounted to $9.4 billion, compared with $10.9 billion in December 2019.
During the quarter, the company’s cash balances totaled $1.5 billion compared with $225 million in December 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 third-quarter 2020, Marriott's development pipeline totaled nearly 2,900 hotels, with approximately 496,000 rooms. Further, nearly 228,000 rooms were under construction.
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