Shares in Marriott International Inc (NYSE:MAR) fell 4% in pre-market trading in New York despite the hotel group beating profit forecasts and raising its full-year outlook for room revenue growth.
Adjusted earnings of $3.19 a share for the three months to June came in comfortably ahead of the $3.05 to $3.08 that analysts had pencilled in.
The problem lay on the top line, where revenue of $7.07 billion undershot consensus estimates ranging from $7.17 billion to $7.26 billion.
That figure is a blunt instrument for a company like Marriott, since more than $5 billion of it is cost reimbursement revenue that the company collects from hotel owners and passes straight back out with no mark-up.
Stripped of that, adjusted revenue rose 11% to $2.01 billion. The more substantive concern is the shape of the second half.
Marriott guided to third-quarter adjusted earnings of $2.74 to $2.82 a share and adjusted profit growth of 7% to 9%, a marked deceleration from the 13% delivered in the second quarter.
Full-year adjusted earnings guidance of $11.64 to $11.81 sits barely above the $11.64 consensus, meaning the second-quarter beat has not been carried through to the annual number.
The company also pointed to the low end of its 4.5% to 5% range for net room growth.
International trading remains the weak spot, with revenue per available room down 0.5% as a 43% collapse in the Middle East swamped a 5% gain in Europe and modest growth in Greater China.
The quarter also absorbed a $68 million impairment on the sale of a hotel in the United States and a $27 million litigation accrual.
Set against a share price up more than 40% over the past year, the bar for a positive reaction was high.
