BETHESDA - Marriott International Inc. (NASDAQ:MAR) reported a robust increase in its adjusted earnings per share (EPS) for the fourth quarter, surpassing analyst expectations. However, the company's revenue fell short of forecasts.
The hotel giant's adjusted EPS soared to $3.57, significantly beating the analyst estimate of $2.12. Despite this, quarterly revenue was reported at $6.09 billion, missing the consensus estimate of $6.2 billion.
The company's reported diluted EPS also increased from $2.12 in the same quarter last year to $2.87. Adjusted net income rose from $622 million in the fourth quarter of 2022 to $1,055 million in the current year's quarter. Additionally, Marriott's adjusted EBITDA for the quarter grew to $1,197 million, up from $1,090 million a year ago.
Marriott's global room additions and development pipeline expansion were significant in 2023, with nearly 81,300 rooms added, including a substantial number from international markets and the City Express transaction. The company's development pipeline reached a new high with nearly 3,400 properties and approximately 573,000 rooms.
The company's CEO highlighted the quarter's success, stating, "International RevPAR grew 17 percent, with particular strength in Asia Pacific and Europe." He also noted the growth in group revenue in the U.S. & Canada, driven by solid rate increases.
For the upcoming year, Marriott provided guidance that fell below analyst expectations. The company forecasts first-quarter 2024 EPS to be between $2.12 and $2.19, which is below the consensus of $2.30. For the full year 2024, Marriott anticipates an EPS range of $9.18 to $9.52, again lower than the analyst consensus of $9.69.
Despite the mixed results, Marriott's stock experienced only a slight dip of 0.5% following the earnings release, indicating a relatively muted market response.
Looking ahead, the company expects a worldwide full-year RevPAR increase of 3 to 5 percent and net room growth of 5.5 to 6 percent for 2024.
Marriott's CEO expressed optimism for the year ahead, projecting adjusted EBITDA of approximately $4.9 billion to $5.0 billion and plans to return $4.1 billion to $4.3 billion to shareholders, including a $500 million purchase of the Sheraton Grand Chicago.
InvestingPro Insights
Marriott International Inc. (NASDAQ:MAR) has demonstrated a strong financial performance in the last quarter, with a significant increase in adjusted earnings per share (EPS). According to InvestingPro data, the company boasts a market capitalization of $73.08 billion and a robust gross profit margin of 81.13% for the last twelve months as of Q3 2023. These figures reflect Marriott's effective cost management and its ability to maintain profitability despite economic headwinds.
One of the InvestingPro Tips highlights that management has been aggressively buying back shares, which often signals confidence in the company's future and can be a positive indicator for investors. Additionally, 7 analysts have revised their earnings upwards for the upcoming period, suggesting an optimistic outlook on the company's financial trajectory. With a P/E ratio of 26.22 and an even more attractive adjusted P/E ratio of 25.21 for the same period, Marriott appears to be trading at a reasonable valuation relative to its earnings growth.
Investors looking to delve deeper into Marriott's financials and future prospects can find a wealth of additional insights on InvestingPro. There are 15 more InvestingPro Tips available for Marriott, which can be accessed by visiting https://www.investing.com/pro/MAR. For those interested in a subscription, use the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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