Earnings Preview: Marriott International

Marriott International (MAR) is expected to report Q3 earnings before market open Thursday Oct. 2, with a conference call scheduled for 10:00 am ET.

Guidance

Analysts are looking for a profit of 32c on revenue of $2.95B. The consensus range is 30c to 34c for EPS, and revenue of $2.27B to $3.22B, according to First Call. In July, Marriott forecast Q3 EPS 30c to 35c and FY08 EPS $1.77 to $1.88 vs. First Call consensus of $1.78.

Analyst Views

In a note to clients, Oppenheimer analyst David Katz said he believes Marriott will underperform this quarter due to high exposure to the U.S. market and its focus on midscale properties. The lodging sector remained under pressure due to decreased travel spending due to the faltering economy, soaring gas and food prices and worries about jobs and home prices.

JP Morgan believes that when lodging companies report, they will be cautious in their preliminary FY09 outlook given limited visibility and concern about hotel demand. On the other hand, Citi analyst Joshua Attie notes that most of Marriott's earnings consist of high-margin management and franchise fees and recommends the company as a long term investment.

Marriott said during the quarter that it will nearly triple its presence in Mexico in the next five years, adding 29 branded Marriott hotels in the country and creating an estimated 3,000 new jobs.