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$MAR Form 4: Juliana B. Marriott Marital Trust, Member of a 10% Group, acquired 69,827 shares of Marriott International’s Class A Common Stock as gift in a transaction dated Thursday, March 19, 2015. Following the completion of the transaction, Juliana B. Marriott Marital Trust now directly owns 538,896 shares in Marriott International.
$MAR expects its comparable systemwide RevPAR, on constant dollar basis, to grow between 1% and 3% worldwide in fiscal 2018. While the company sees the North America RevPAR to be flat to up 2%, outside North America it is forecast to grow 3.5%. Meanwhile, the number of rooms worldwide is estimated to increase by 7% in FY18.
$MAR said it anticipates recording earnings in the range of $0.98 to $1 per share in 4Q17, on expected revenues of $825-$835MM. Fourth quarter operating income is forecast in the $600-$615MM range. For fiscal 2017, Marriott is looking for earnings of $4.22-$4.24 per share, and total revenues in the range of $3.287Bil and $3.297Bil.
Earnings of hotel chain $MAR spiked in 3Q17 as revenues rose 44% to $5.7Bil, helped by strong demand for leisure business in Asia and Europe and contributions from an acquired entity. Earnings climbed to $1.04 per share from $0.26 per share last year. Adjusted income was $1.10 per share, up 26% from 3Q16. Worldwide comparable RevPAR rose 2% YoY.
$MAR said EVP and general counsel Ed Ryan will retire from the position. Ed will continue as general counsel through early December, at which point he'll transition to an advisory role to company president and CEO, Arne Sorenson, through 2018. The company anticipates announcing Ed's successor shortly.
$MAR said the most important part of the benefits of the deal with Alibaba will be driving hotel demand, which will then come through the P&L, RevPAR, fees and incentive fees. The company believes there are chances to make money on the JV itself, but that is not the primary focus.
$MAR stated that in 2Q17, occupancy was strong. System-wide occupancy across North America was around 80% which could lead to some pricing movement. There is strength in leisure which is more price-sensitive than the corporate business. The market has radical transparency in pricing which could impact the ability to move rates in the current cycle.
$MAR expects to grow its system-wide rooms by 6% net in 2017. Its pipeline reached 440,000 rooms in 2Q17, implying embedded growth of 36% of its current system size. In 2Q17, $MAR added 36,000 signed or approved rooms to the pipeline. One-third of these new room signings and approvals were legacy Starwood brands and 55% were outside North America.
$MAR's JV with Alibaba will create a new Marriott booking portal on Alibaba’s travel site Fliggy enabling $MAR to benefit from the broad reach of Alibaba's digital Chinese language platform. The JV will manage $MAR’s storefront, market directly to Alibaba's customer base, leverage Alibaba's IT and marketing infrastructure and link loyalty programs.
In 2Q17, $MAR’s worldwide comparable systemwide constant dollar RevPAR increased 2.2% versus 2Q16. North American comparable systemwide constant dollar RevPAR increased 0.9% and international comparable systemwide constant dollar RevPAR increased 5.8% compared to 2Q16.
$MAR expects total fee revenue of $810-825MM and EPS of $0.96-0.99 in 3Q17. Total fee revenue is expected to be $804-849MM and EPS is expected to be $0.96-1.05 in 4Q17. For full-year 2017, total fee revenue is expected to be $3.24-3.30Bil and EPS is expected to be $4.06-4.18.
$MAR reported net income of $414MM in 2Q17, a 68% increase over $247MM in 2Q16. Diluted EPS was $1.08 in 2Q17, up 13% from $0.96 in the year-ago quarter. Adjusted net income was $432MM or $1.13 per share in 2Q17. Total revenues increased 49% to $5.79Bil compared to last year.