Earnings Preview: Marriott International

Marriott International (MAR) is expected to report Q2 earnings before market open on Thursday, July 10, with a conference call scheduled for 10:00 am ET.

Guidance

Analysts are looking for a profit of 49c on revenue of $3.15B. The consensus range is 46c to 52c for EPS, and revenue of $2.67B to $3.29B, according to First Call. In April, the company forecast Q2 EPS 48c to 52c and FY08 EPS $1.98 to $2.08 vs. First Call consensus of $1.93.

Analyst Views

On June 13, Wachovia lowered its rating on the Lodging sector to Market Weight from Overweight. After attending the NYU Hospitality Investment Conference and NAREIT, the firm sees a lack of catalysts within the industry in the near-term due to concerns related to "leisure demand decelerating, increased concern over discretionary spending, and difficult YOY comps from mid-July through August" and "headlines on high/volatile oil prices, high retail gas prices and reduced airline capacity..."

JP Morgan, in a June 30 note, agreed, lowering Marriott's target to $34 from $47 to reflect the belief that U.S. lodging demand will continue to be hurt by decreased corporate and leisure transient volumes. However, Deutsche Bank believes Marriott has a favorable risk/reward profile when compared to rival Starwood Hotels (HOT). Marriott has also been faced with renewed takeover speculation this quarter.