Marriott Shares Fall After Hit From Cyber Fine Crimps Earnings

(Bloomberg) -- Marriott International Inc. reported earnings per share of 69 cents, compared with $1.87 in the year-ago quarter, after the company took a one-time charge of $126 million related to the massive cyber-breach in one of its reservation databases. Shares fell.

• Marriott booked the merger-related cost after the U.K. Information Commissioner’s Office announced its intention to fine under the General Data Protection Regulation. The amount doesn’t represent a final ruling, and Marriott has said it plans to contest the decision.

Key Insights

• The potential fine accounts for a big part of the difference between the second quarter of 2019 and the year-ago period, when Marriott also benefited from one-time income from the sale of hotel properties. Adjusted earnings per share was $1.56, in line with the consensus of analyst estimates.
• Marriott has faced increased scrutiny as the largest player in the global hospitality industry since buying Starwood Hotels & Resorts in 2016, an acquisition that included the reservation system that hackers used to access more than 300 million guest records.
• Hotel workers have targeted Marriott, arguing that it has the power to set wage and benefit standards for the industry. So has the District of Columbia Attorney General’s office, which is suing Marriott over “deceptive” resort fees. Marriott Chief Executive Officer Arne Sorenson has said the company will fight the lawsuit.
• Marriott narrowed full-year guidance for revenue per available room to between 1% and 2%, the lower end of the range it gave in May. That follows similar moves by Hilton Worldwide Holdings Inc. and Hyatt Hotels Corp., both of which reduced expectations for RevPar, a key metric for hotels.

Market Reaction

• The shares fell 3% in after-market trading. The shares are up 20% this year.

Get More

• Click here to read Marriott’s earnings statement.

To contact the reporter on this story: Patrick Clark in New York at pclark55@bloomberg.net

To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Christine Maurus

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