Marriott reports surprise profit and revenue that tops expectations, but stock slips

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Shares of Marriott International Inc. slipped 1.0% in premarket trading Friday, although the hotel operator reported a surprise third-quarter profit and revenue that fell a little less than forecast, while not providing financial guidance given “numerous uncertainties” associated with the COVID-19 pandemic. Net income fell to $100 million, or 31 cents a share, from $387 million, or $1.16 a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share fell to 6 cents from $1.47, while the FactSet consensus was for a per-share loss of 8 cents. Revenue dropped 57.3% to $2.25 billion, topping the FactSet consensus of $2.22 billion. Worldwide revenue per available room (RevPAR) dropped 65.9%, after falling 84.4% in the second quarter. Occupancy in North America was 37%, nearly double the second-quarter rate, primarily driven by leisure and drive-to demand, with business and group recovering more slowly. “While COVID-19 is still significantly impacting our business, our results for the third quarter showed continued improvement in demand trends around the world,” said Chief Executive Arne Sorenson. China occupancy was 61% and the RevPAR decline of 26% was a 35%-percentage-point improvement from the second quarter. The stock has slumped 33.4% year to date through Thursday, while the SPDR Consumer Discretionary Select Sector ETF has climbed 22.2% and the S&P 500 has gained 8.7%.
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