Within the past 24 hours we’ve gotten 2 reasons to believe Americans are vacationing again. Great earnings reports from Priceline.com (NASDAQ:PCLN) and Marriot International (NASDAQ:MAR) both indicate that travelers are back on the road.
Marriott reported 4th-quarter financial results after the closing bell Wednesday. Marriott’s profits came in at 68 cents per share, well above investors’ expectations. The hotel company’s guidance from the prior quarter suggested that EPS would fall between 62 cents and 66 cents.
Wall Street had come to a consensus expectation that Marriott would report 65 cents in earnings per share. Contributing analysts on Estimize were slightly more optimistic, forecasting 66 cents.
Marriott’s 39% year-over-year increase in earnings per share was driven by 11% revenue growth and an aggressive stock buyback program. In 2015 Marriott spent $1.5 billion to repurchase 24.2 million of its own shares. 7.7 million of those shares were bought back in the holiday quarter for $544 million.
Stock buyback programs have become a popular way for companies to boost earnings without requiring much revenue growth. Here Marriott’s 11% sales increase is a 5th-quarter high.
Priceline gave us further proof Thursday morning that travelers are packing their bags. Priceline reported 23% earnings growth and a 19% improvement to revenue.
Priceline noted that winter bookings were led by gains in car rentals and hotel reservations. Airfare was a point of relative weakness. Fewer consumers purchased airline tickets through Priceline than they did one year ago.
Not to be outdone, Priceline announced an expansion to its own share buyback program. Priceline has received authorization from its board to repurchase an additional $3 billion in stock, which could push EPS even higher this year.