Isle niche a challenge for Wyndham
Though tour flow is faltering in Hawaii, quarterly revenue rose in the time-share market
Wyndham Worldwide Corp
. said yesterday that its second-quarter earnings gained 2 percent, beating Wall Street's profit expectations, although its revenue missed forecasts and it cut its full-year guidance.
Earnings rose to $98 million, or 55 cents per share, from $96 million, or 52 cents per share, a year ago. Excluding some items related to its 2006 spin-off from Cendant Corp., earnings totaled $94 million, or 53 cents per share, compared with $89 million, or 49 cents per share in the prior-year period.
The Parsippany, N.J.-based company's revenue rose 3 percent to $1.13 billion, from $1.1 billion in the second quarter of 2007.
Analysts surveyed by Thomson Financial forecast adjusted earnings of 47 cents per share on higher revenue of $1.18 billion.
In the hotel group, revenue per available room, or revpar, grew 1.4 percent as a surge in international growth offset a 3.7 percent drop in domestic results. Revpar is considered a key gauge of a hospitality company's performance.
Vacation time-share sales rose 2 percent to $532 million, although revenues dipped 1 percent to $621 million due to a higher loan loss reserve. The company's management also noted that some timeshare income was accelerated into the second-quarter from the fourth-quarter due to shifts in construction timing and other factors.
In a conference call with investors, Chairman and Chief Executive Stephen Holmes said timeshare interest is "holding up well," especially considering tighter consumer spending. He noted, however, that the Hawaii and Las Vegas markets were more challenging, with sales to new customers falling in both locations.
"We do see a little bit of softness in tour flow in Hawaii -- actually Las Vegas tour flow was up a little bit. So it really wasn't a question of demand, it's a question of how many we can close," Holmes said.
In the vacation exchange and rentals group, revenue grew 9 percent to $314 million as the average number of members increased, although annual dues per member fell. Wyndham attributed the decline to customers booking their vacations closer to their travel dates and fewer higher priced international exchange requests.