Zacks Analyst Blog Highlights: IBM,H,HOT,MAR,IHG – Press Releases

For Immediate Release

Chicago, IL – October 19 2010 – Zacks.com Analyst Blog features: International Business Machines Corp.  (IBM), Hyatt Hotels Corporation (NYSE: H), Starwood Hotels and Resorts Worldwide Inc. (HOT), Marriott International, Inc. ( MAR) and InterContinental Hotels Group PLC (IHG).

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Here are highlights from Monday’s Analyst Blog:

IBM Tops but Shares Drop

Investors knew what they were doing when pushing shares of IBM (IBM) to within a stone’s throw of its 52-week high in the run-up to its third-quarter report.

After the bell on Monday, IBM announced earnings per share of $2.82 for the quarter, which beat the Zacks Consensus Estimate of $2.75 by about 2.5%. This was the 12th straight quarter with a positive earnings surprise. In fact, the worst that the company has done in the past several years has been to match expectations.

The result was also nearly 18% better than the previous year’s $2.40 per share. The company made sure to let us know that it has put together 31 straight quarters of EPS growth, with 13 of the last 15 being in double digits.

Total revenues increased 3% from last year to $24.3 billion, which was also ahead of the Zacks Consensus Estimate at practically $24.1 billion. This is important since IBM failed to meet revenue expectations in the second quarter.

IBM sees earnings per share to be at least $11.40 in 2010, which is well ahead of the Zacks Consensus Estimate at $11.28.

Right now there are 21 total estimates for 2010 and 20 total estimates for 2011. In the past 30 days, there has been a grand total of 1 (one) revision. It was to the upside though! That’s a lot of analysts who have been sitting on their hands when it comes to IBM. It’s no wonder that this company is a Zacks #3 Rank (‘hold’).

As mentioned above, the company is expected to earn $11.28 per share this year. That’s a penny below the result from 2 months ago and 2 cents better than 3 months ago. It’s really not even worth mentioning that though. Basically, it hasn’t moved in a while.

Hyatt Expands in China

Hyatt Hotels Corporation (H), a leading global hospitality company, is set to further explore the Chinese hotel market. The company announced the signing of contracts to manage eleven additional hotels in China. This would double the company’s properties to 22.

Hyatt currently manages 17 hotels in China, representing the largest market outside United States. The company plans to open 4 hotels, comprising Hyatt Ningbo, Hyatt Regency Jinan, Hyatt Regency Guiyang and Hyatt Regency Qingdao in 2011, and additional nine properties in 2012.

Based in Chicago, Illinois, the company also plans to expand in the Indian market by opening 15 new markets over the next 5 years.

Hyatthas benefited from the recovery in business travel, as the company’s comparable international Revenue per Available Room (RevPAR) jumped 21.4% year over year in second quarter of 2010, primarily attributable to the strong performance in Asia-Pacific region.

The demand for hotels is greater in the international market than in the U.S., where the pace of economic recovery is particularly fast. Many U.S.based companies are targeting the fast-growing emerging economies to set up a base to explore the growth opportunities they present.

The Asia-Pacific region, particularly China and India, promises solid growth potential. As a consequence, its peer companies such as Starwood Hotels and Resorts Worldwide Inc. (HOT), Marriott International Inc. (MAR), InterContinental Hotels Group plc (IHG) are also expanding their pipeline in this region.

We have a Zacks #2 Rank (short-term Buy recommendation) on the shares. We also reiterate our long-term Neutral rating.

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