By Aisha Al-Muslim
Shares of Marriott International Inc. (MAR) fell more than 5% in after-hours trading Monday after the hotel chain reported an earnings beat in its latest quarter but total revenue missed expectations.
Marriott recorded a third-quarter profit of $483 million, or $1.38 a share, slightly down from $485 million, or $1.29 a share, a year earlier. Adjusted earnings were $1.70 a share, beating the $1.31 a share analysts polled by Refinitiv were looking for.
Total revenue dropped 1% to $5.05 billion, missing the consensus forecast of $5.37 billion. Worldwide comparable systemwide revenue per available room, or RevPAR, was up 2%.
The company also raised its earnings per share to between $6.15 and $6.18 for the full year, up from its previous estimate between $5.81 and $5.91. The company guided comparable systemwide RevPAR on a constant-dollar basis increasing about 3% worldwide for the full year, down from the previous outlook of 3% to 4%.
For the fourth quarter, the company guided earnings per share between $1.37 and $1.41, down its previous outlook of between $1.47 and $1.52. The company also expects comparable systemwide RevPAR on a constant-dollar basis will increase about 2% worldwide, down from its previous guidance of 2.5% to 3%.
For 2019, the company expects comparable systemwide RevPAR on a constant-dollar basis will increase 2% to 3% worldwide.
About 8,000 Marriott union workers in eight cities voted to strike in early October, resulting in the largest multi-hotel strike in the U.S., according to Unite Here, the union that represents more than 20,000 Marriott hotel workers across North America.
Over the weekend, striking hotel workers at two Marriott properties in Oakland and Detroit reached a settlement with Marriott and ratified contract agreements, union representatives said.
But the strikes continues for the fifth week for more than 7,000 Marriott workers at 22 Marriott properties in San Jose, San Francisco, San Diego, Maui, Oahu, and Boston, out of more than 6,700 Marriott hotels.
"Detroit and Oakland have reached a settlement that is good for them but the other five cities have not," union president D. Taylor said Monday. "The economics of Detroit are a little bit different than San Francisco or Honolulu," Mr. Taylor said referring to the cost of living. At least a 3% increase in wages generally tends to satisfy union workers, he added.
The settlements for Oakland and Detroit include resolutions on national issues impacting hotel workers that the union has fought for, including higher pay, better benefits, improved workplace safety and job protections for workers as innovation and new technology in the industry develops, the union said.
"The company has been negotiating in good faith with union leaders at both the local city level and at the national level for many months with the goal of reaching contracts that are fair for our associates, our guests and our owners. And we are making progress," a Marriott spokeswoman said Monday. She pointed out Marriott had averted strikes at hotels in Seattle and Toronto.
Oakland and Detroit will share the details of their new contracts after the other six cities have reached agreements, the union said. Negotiations are scheduled for the remaining striking cities over the next week and a half, the union said.
"We would love to have settlements, but as I always say, I am extremely optimistic but I always prepare for long, tough fights," Mr. Taylor said.
As of Monday's close, shares of Marriott are down 0.7% in the last 12 months.
Write to Aisha Al-Muslim at firstname.lastname@example.org