What happened
Wednesday was a fine day to be a Marriott International (MAR) shareholder. The company not only posted estimate-busting first-quarter results, but it also reinstated its dividend. These developments pushed the hotelier's stock nearly 5% higher on the day.
So what
For the quarter, Marriott's revenue zoomed 81% higher on a year-over-year basis to just under $4.2 billion. The change in non-GAAP (adjusted) net profit was even more dramatic, at $413 million ($1.25 per share) vs. the $34 million in first-quarter 2021.
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Those figures exceeded analyst expectations, particularly the bottom-line profit. On average, prognosticators following the stock were modeling revenue of slightly more than $4.1 billion and adjusted per-share earnings of only $0.90.
As with other businesses in, or strongly tied to, travel and tourism, Marriott benefited strongly from the recovery in such activities as the world seems to be getting past the worst of the coronavirus pandemic.
In fact, as the company quoted CEO Anthony Capuano as saying, "During the first quarter, we saw the largest surge in global demand since the pandemic began in 2020."
The difference was stark. Capuano added that for the company, "Worldwide occupancy rose dramatically from 45% in January, impacted by the omicron variant, to 64% in March, less than 10 percentage points below pre-pandemic levels."
Now what
While Marriott did not proffer any guidance in its earnings release, going by Capuano's remarks that the company is very optimistic about the future. He specifically singled out the leisure and business travel segments, speculating that the former should "remain strong" and the latter to "accelerate," although no specific estimates were proffered. The company is also counting on cross-border travel to rise.