Hawaii sales boost Wyndham profit
Isle time-share units helped fourth-quarter net jump 13 percent
PARSIPPANY, N.J. » Wyndham Worldwide Corp., the world's largest time-share company, said fourth-quarter profit rose 13 percent as it sold more vacation units in Florida, Tennessee and Hawaii.
Wyndham reiterated its full-year earnings forecast.
Net income climbed to $104 million, or 58 cents a share, compared with $92 million, or 48 cents, a year earlier, the Parsippany, New Jersey-based company said today in a statement. Excluding a litigation gain, Wyndham earned 46 cents, matching analysts' estimates.
Wyndham franchises Ramada and Super 8 Motels. Chief Executive Officer Stephen Holmes has said he wants to increase the hotel division to about 35 percent of total revenue from 25 percent. The company is marketing time-share units to consumers looking for a lower-priced holiday as rising gas prices and falling home values cause economic uncertainty.
"People still go on vacation, and time shares are a less expensive way to travel," said Eric Green, director of research at Penn Capital Management in Cherry Hill, New Jersey, which manages Wyndham stock. "It's a good business and a profitable business that's good for the consumer."
Revenue increased 6.4 percent to $1.03 billion, Wyndham said.
Wyndham climbed 74 cents to $23.38 at 12:40 p.m. in New York Stock Exchange composite trading.
In mid-December, Wyndham lowered its fourth-quarter profit forecast to 42 cents to 50 cents a share, excluding some items.
Analysts subsequently reduced their average estimate to 46 cents a share, according to a Bloomberg survey. They predicted revenue would be $1.07 billion.
Wyndham reaffirmed today that it expects 2008 profit of $2.23 to $2.38 a share on revenue of as much as $4.9 billion. Analysts predict earnings of $2.32 on revenue of $4.85 billion.
For the first quarter, Wyndham forecast earnings of 30 to 35 cents a share. Six analysts project profit of 34 cents.
Wyndham maintained its forecast from December because the company isn't seeing any slowdown in time-share sales even as home purchases decline, Holmes said in a phone interview.
"The time-share industry does not track the real-estate industry," Holmes said. "The fact is that people looking to pay for time shares are pre-paying their vacations. It's not a real-estate purchase decision."