Wyndham Profit Beats; Announces Share Buyback
Wyndham Worldwide first-quarter net income tumbled 56 percent as the hotel company incurred huge charges to extinguish debt early, but topped Wall Street expectations easily when those one-time costs are removed.
Revenue jumped 9 percent to $1.04 billion, also edging out most expectations, and the hotel chain boosted its full-year adjusted earnings forecast above what analysts had been predicting.
Wyndham earned $32 million, or 21 cents per share, for the three months ended March 31. That's down from $72 million, or 41 cents per share, a year earlier.
Excluding a $62 million early extinguishment charge and a benefit of $4 million tied to legacy and other adjustments, earnings were 60 cents per share compared with 44 cents per share in the prior-year period.
Analysts predicted earnings of 55 cents per share.
There have been signs of a thaw in the hotel industry after years of stagnation.
Just last week, Marriott International said that it expects room rates and fee revenue to rise at a fast pace this year after rising occupancy rates drove its first-quarter profits higher.
Lodging revenue at Wyndham climbed 24 percent to $185 million, while vacation ownership revenue increased 11 percent to $501 million.
Revenue for the vacation exchange and rentals segment increased 1 percent to $361 million.
Wyndham Worldwide, which runs hotels under brands including Wyndham Hotels and Resorts and Days Inn and sells vacation time shares, also said Wednesday that it is upping its buyback program by $750 million.
The Parsippany, N.J. company now anticipates 2012 adjusted earnings of $3 to $3.15 per share, up from a range of $2.85 to $3 per share. It maintained that revenue will be between about $4.43 billion and $4.6 billion.
Analysts expect full-year earnings of $2.98 per share on revenue of $4.51 billion.
After the earnings announcement, the company's shares slipped in trading on the New York Stock Exchange. (Click here to get real-time quotes for Wyndham.)