Wyndham Worldwide Corporation posted mixed results for the second quarter of 2016, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.

Earnings and Revenue Discussion

Adjusted earnings of $1.40 per share beat the Zacks Consensus Estimate of $1.36 by 2.9%. Earnings were also up 6.1% year over year, reflecting higher revenues and lower share count.

Net revenues of $1.40 billion improved 0.4% year over year on the back of increased contribution from the vacation ownership segment. Revenues, however, missed the Zacks Consensus Estimate of $1.45 billion by 3.3%.

Inside the Headline Numbers

Adjusted EBITDA (excluding share-based compensation expense) grew 4.3% year over year to $360 million. Meanwhile, at constant currency, the figure grew 3%.

Wyndham has three operating segments: Hotel Group, Destination Network (formerly known as Vacation Exchange and Rentals) and Vacation Ownership.

Hotel Group revenues were $334 million, flat with the year-ago figure.

Domestic RevPAR inched up 2%. At constant currency, total system-wide RevPAR dipped 0.6% year over year mainly due to weak demand in the U.S. and Canadian oil markets, along with higher unit growth in lower RevPAR regions like China.

Adjusted EBITDA increased 5% to $101 million driven by growth in royalties and the company’s the Wyndham Rewards credit card program and prudent expense management.

Revenues at Destination Network were $384 million, flat with the year-ago figure. However, at constant currency and excluding acquisitions, revenues recorded an improvement of 1%.

Exchange revenues dipped 1% to $159 million. However, the figure grew 1% at constant currency, as the average number of members inched up 0.7% and exchange revenue per member rose 0.3%.

Vacation rental revenues were $202 million, reflecting 1% year-over-year growth. Moreover, at constant currency and excluding acquisitions, vacation rental revenues inched up 1% driven by a 4% increase in transaction volumes, partly offset by a decline of 3.3% in average net price per vacation rental.

Adjusted EBITDA inched up 1% to $85 million. On a currency-neutral basis and excluding acquisitions, adjusted EBITDA grew 2%.

Revenues at Vacation Ownership inched up 1% year over year to $705 million.

Gross VOI sales (including currency impact) increased 3% to $518 million, reflecting tour growth of 3.4%, somewhat offset by a 0.8% decline (in constant currency) in volume per guest (VPG).

Adjusted EBITDA increased 3% to $187 million on the back of higher gross VOI sales, a lower cost of sales and higher management fees.

WYNDHAM WORLDWD Price, Consensus and EPS Surprise

WYNDHAM WORLDWD Price, Consensus and EPS Surprise | WYNDHAM WORLDWD Quote

Share Repurchase

The company repurchased 2.1 million shares for $150 million during the second quarter of 2016.

2016 Guidance

For 2016, the company projects adjusted net income in the range of roughly $635–$651 million. Notably, Wyndham expects adjusted earnings per share in the band of $5.68 to $5.82 per share, up from the prior guidance of $5.61–$5.75.

However, the company cut down its 2016 revenue guidance to $5.65–$5.80 billion from $5.80–$5.95 billion projected earlier.

Meanwhile, it reiterated its adjusted EBITDA projection at $1.375–$1.400 billion.

Zacks Rank & Stocks to Consider

Wyndham presently has a Zacks Rank #4 (Sell). Better-ranked stocks in the sector include Intrawest Resorts Holdings, Inc. (SNOW Quick QuoteSNOW - Free Report) , Marriott Vacations Worldwide Corp. (VAC Quick QuoteVAC - Free Report) and Belmond Ltd. . While Intrawest Resorts Holdings and Marriott Vacations sport a Zacks Rank #1 (Strong Buy), Belmond carries a Zacks Rank #2 (Buy).

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