Wyndham Books Profits Better Than Expected
Wyndham Worldwide posted a better-than-expected 27 percent rise in third-quarter earnings Wednesday, helped by strong time-share sales and robust hotel demand.
The largest U.S. hotel company by rooms bucked the trend in the lodging sector. Starwood Hotels & Resorts and Marriott International posted lower quarterly earnings, heightening concerns of a slowdown in the booming industry.
But Wyndham , which serves primarily leisure travelers through its large time-share businesses and bargain hotel chains, remains confident despite fears of a slowing U.S. economy.
"Demand is still out there," Chief Executive Stephen Holmes told Reuters. "We continue to see people staying out at our hotels. We continue to see people traveling for leisure. All of that is keeping pace."
The company, which operates hotel brands such as Ramada, Days Inn, and Super 8, said third-quarter net income rose to $117 million, or 65 cents per share, from $92 million, or 45 cents per share, a year earlier.
Excluding costs from Wyndham's July 2006 spin-off from Cendant Corp and other items, earnings were 75 cents per share, beating Wall Street expectations of 72 cents, according to Reuters Estimates.
Revenue rose 16 percent to $1.2 billion, boosted by a 22 percent rise in sales at the time-share resort business.
By contrast, Starwood and Marriott both said their time-share businesses had suffered from lack of inventory.
Wyndham also said it had priced securities backed by its time-share receivables. Last week, Starwood said it had delayed a similar transaction because of softness in the asset-backed securities market.
Revenue per available room, or revpar -- a key measure of hotel performance that reflects rates and occupancy -- rose 5.6 percent system-wide at Wyndham.
The company said it expected to earn 44 cents to 46 cents per share, excluding items, in the fourth quarter. That's below analysts' forecasts of 48 cents, according to Reuters Estimates.
For 2008, Wyndham forecast earnings of $920 million to $945 million before interest, taxes, depreciation and amortization, with revenue at $4.8 billion to $4.9 billion.
Wyndham shares have fallen about 17 percent since hitting a record high of $39.40 on July 5.