Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Leading hospitality company Wyndham Worldwide Corporation’s (WYN - Analyst Report) first-quarter 2013 adjusted earnings of 71 cents per share surpassed the Zacks Consensus Estimate by 7.6% and also grew 18.3% year over year. Wyndham’s growing Lodging as well as Vacation Ownership businesses and share buybacks pushed up the earnings for the quarter.

Net revenues grew 9% year over year to $1.1 billion during the quarter, in line with the Zacks Consensus Estimate.

Inside the Headline Numbers

Wyndham has three operating segments including Lodging, Vacation Exchange and Rentals and Vacation Ownership. All the three segments have both domestic and international operations.

Wyndham’s Lodging segment reported revenues of $222.0 million for the quarter, increased 20% year over year, driven by a 4.0% rise in revenue per available room (RevPAR) and higher hotel management reimbursable fees. International expansion and higher revenues earned from the company-owned property in Puerto Rico also boosted the segment’s sales during the quarter.

Revenues from the Vacation Exchange and Rentals segment nudged up 3.6% year over year to $374.0 million. However, in constant currency, segment revenues were up 1% year over year (acquisitions excluded).

Vacation rental revenues surged 4% year over year to $166.0 million while Exchange revenues were up 3% year over year to $193.0 million, driven by 3% rise in exchange revenue per member.

Revenues from the Vacation Ownership segment at Wyndham rose 9.6% to $549.0 million. However, the same has improved 2% without the impact of Shell Vacations Club acquisition. Vacation Ownership Interest (VOI) sales remained flat year over year to $384 million as 10% rise in tour flow was neutralized by an 8% drop in volume per guest.

In the first quarter, operating income increased annually by 1.7% to $181.0 million. The earnings before income tax, depreciation and amortization (EBITDA) grew 3.5% year over year to $234 million during the quarter, buoyed by higher EBITDA gain in Wyndham’s Lodging and Vacation Ownership businesses.

Hotels Update

At the end of the quarter, Wyndham owned 7,380 properties with 631,800 guestrooms. Additionally, 950 hotels with nearly 110,000 rooms are currently under the company’s construction pipeline.

Share Repurchase

Wyndham has bought back approximately 2.4 million shares worth $140.0 million in the first quarter. During April, Wyndham repurchased 620,000 shares at the cost of $39 million. Currently about $328.0 million worth of shares remained under its existing share repurchase program.

Guidance Retained

Management maintained its revenue and EBITDA guidance for 2013. Wyndham expects revenues to be within $4.925 - $5.100 billion while adjusted EBITDA outlook ranges from $1.140 to $1.165 billion. Wyndham now projects adjusted earnings per share between $3.60 - $3.70 in 2013.

Our Take

Amid a sluggish economic environment, Wyndham has gained from its strong operational performance in the Vacation Ownership and Lodging businesses, increased global travel demand, revival of the North American market and further international expansion. Wyndham’s achievement of more than 18% growth in adjusted earnings in the reported quarter depicts the strength in its fundamentals.

However, Wyndham’s European business will face a headwind from the prevailing economic uncertainties, especially in the U.K., where austerity measures are hurting consumer confidence.

Wyndham currently carries a Zacks Rank #3 (Hold). Some other hoteliers like Marriott International, Inc. (MAR - Analyst Report) and Hyatt Hotels Corporation (H - Snapshot Report) are going to report their first-quarter earnings on May 1. Another hotelier Starwood Hotels & Resorts Worldwide Inc. (HOT - Analyst Report) is expected to report on Apr 30.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%