Wyndham Worldwide Corp.'s (WYN) third-quarter profit decreased
27% as the company's hotel and timeshare businesses continued to
suffer amid broad industry weakness.
The company also expects fourth-quarter earnings of 35 cents to
38 cents a share. Analysts polled by Thomson Reuters expected 32
cents. It also reaffirmed its 2009 earnings forecast.
Shares were up 1.9% to $17 in premarket trading as the
third-quarter results edged forecasts. The stock has more than
doubled this year.
There have been some signs the lodging sector is stabilizing.
Marriot International Inc. (MAR), Host Hotels & Resorts Inc.
(HST) and Starwood Hotels & Resorts Worldwide Inc. (HOT) posted
better-than-expected results in the latest quarter, supporting the
view the worst may be over for the industry, although challenges
remain. Wynn's latest results were generally in line with
expectations.
The operator of the Ramada, Howard Johnson and Days Inn hotel
chains posted a profit of $104 million, or 57 cents a share, down
from $142 million, or 80 cents a share, a year earlier. Excluding
restructuring and other impacts, earnings fell to 58 cents from 83
cents. Wyndham was expecting 53 cents to 57 cents.
Revenue slid 17% to $1.02 billion on continued weakness in the
global lodging industry and unfavorable exchange rates. Analysts
projected $1 billion.
At Wyndham's lodging business, total revenue per available room
decreased 17%, dropping 16% in the U.S. and 22%
internationally.
At its timeshare business, vacation-ownership interest sales
fell 36%. Wyndham and its main timeshare rivals have dramatically
pared their timeshare businesses over the past year to reflect
weakening demand and falling prices. Wyndham, which owns 150
resorts globally, counts 830,000 time-share owners.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com