MARRIOTT Q309 QUICK REVIEW

The quarter was very messy and riddled with charges as expected. However, it looks like clean EPS came in at $0.15, beating the street and company guidance as well as our $0.14 estimate.   Stronger leisure demand and solid cost controls contributed to the better than expected results. 

  • Base management & franchise fee income of $216MM was $5MM above our estimate and incentive fees of $17MM were $7MM better than our estimate
  • Owned, leased & other gross margin was $12MM compared to our estimate of $7MM.  However, the $12MM included a $6MM transaction cancellation fee which we had not contemplated
  • Net timeshare results of $13MM were in line with our estimate

 

4Q09 Guidance

Guidance of $0.20 to $0.23 is in line with the Street ($0.215) and at the higher end of our $0.20 number.  New guidance for $0.20-$0.23 compares to last quarter’s guidance for 4Q09 of $0.18 to $0.28 for the year or $0.20-$0.32 if you use MAR’s expected earnings range for 3Q09.

  • Guidance for fee income of $310-$320 is in line with our $316MM estimate
  • Owned, leased & other guidance of $15-20MM compares to our prior estimate of $15MM
  • Timeshare guidance of $15MM includes $10-$15MM of note sale gains, this compares to our clean estimate of $4MM and no note gains.
  • The total capital expenditure budget stayed constant from last quarter’s guidance with a small reallocation away from timeshare

 

2010 Guidance

  • RevPAR guidance of flat to -5% is in line with our estimate of -2%. Keep in mind that if FX rates stay constant, MAR will have a tailwind from FX benefits reflected in its top line
  • Guidance for fee income of $1,050-$1,110MM is a little stronger than our $1,046MM estimate
  • Timeshare guidance of flat contract sales vs. our estimate of down 5%

 

Stayed tuned for a more detailed review later this morning.


Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more