Marriott Downgrades Q3 Earnings Forecast, Shares Lose 3% in Extended Session

Shares of Marriott International Inc. lost nearly 3% in late trading after having closed the regular trading session 1.1% higher. The hospitality company reported a better-than-expected Q2 earnings but forecasts profit in the current quarter would come below analysts’ expectations.

Marriott shares plunged by 2.99% in after-hours trading to trade at $103.00 per shares after earnings results showed net income of $414 million, or $1.08 a share on sales of $5.8 billion for the three-month period to June 30. This marked an increase from earnings of 97 cents a share on sales of $3.9 billion recorded in the same period last year.

After adjustments for one-time items, the world’s largest hotel chain claimed earnings of $1.13 a share which easily topped market forecast calling for adjusted earnings of $1.01 a share on revenue of $5.64 billion.

Marriott on Monday said it would partner with China’s Alibaba Group Holding Ltd on a travel venture that would allow Chinese travelers to book rooms at Marriott hotels via Alibaba’s travel service platform known as Fliggy.

Despite the plan to aim at the growing number of Chinese citizens travelling abroad who are expected to take an estimated 700 million trips over the next five years, Marriott anticipates its forecast for earnings in the third quarter to be in a range of 96 cents to 99 cents a share, which is slightly lower than analysts’ expectations of $1.01 a share. Revenue the company expects to earn this year from its rooms in North America is forecast to rise between 1 to 2 percent in fiscal 2017, a decrease from its previous forecast of an increase of rise of 1 to 3 percent.

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