Wyndham Beats Earnings & Revs - Analyst Blog

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Leading hospitality company Wyndham Worldwide Corporation 's ( WYN ) second-quarter 2013 adjusted earnings of 98 cents per share surpassed the Zacks Consensus Estimate of 90 cents by 8.9% and grew 12.6% year over year. Higher top line pushed up the earnings for the quarter.

Net revenues grew 10% year over year to $1.3 billion during the quarter, beating the Zacks Consensus Estimate of $1.2 billion by 8.3%. Wyndham's strong Lodging as well as Vacation Ownership businesses played a major role for augmenting the quarterly sales.

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's revenues increased 12% year over year to $262.0 million in the second quarter, led by a 5.3% rise in domestic revenue per available room (RevPAR) and increased hotel management reimbursable fees and higher revenue gains from the company-owned hotels.

Revenues from the Vacation Exchange and Rentals segment were up 8% year over year to $376.0 million. However, in constant currency, segment revenues were up only 4% year over year (acquisitions excluded).

Vacation rental revenues climbed up 13% year over year to $192.0 million while Exchange revenues were up 4% year over year to $168.0 million, driven by a 3% rise in exchange revenue per member.

Revenues from the Vacation Ownership segment rose 11.0% year over year to $630.0 million, driven by higher gross Vacation Ownership Interest (VOI) sales.

Gross VOI sales were up 5% year over year to $481 million, gaining from a 10.8% rise in tour flow offsetting a 4.4% drop in volume per guest.

In the second quarter, operating income increased annually by 4.3% to $241.0 million. The earnings before interest, taxes, depreciation and amortization (EBITDA) grew 5.3% year over year to $297 million during the quarter, buoyed by higher EBITDA gain in Wyndham's Lodging, Vacation Exchange and Rentals and Vacation Ownership businesses.

Hotels Update

At the end of the quarter, Wyndham owned 7,410 properties with 635,100 guestrooms. Additionally, 940 hotels with nearly 112,000 rooms are currently in the company's construction pipeline.

Share Repurchase

Wyndham has bought back approximately 2.9 million shares worth $175.0 million in the second quarter. The company has also authorized an additional $750 million for its existing share repurchase program. Currently, it has $874 million remaining under its share repurchase programs.


Management maintained its revenue and EBITDA guidance for 2013. Wyndham expects revenues to be within $4.925 billion - $5.100 billion while adjusted EBITDA outlook ranges from $1.140 billion to $1.165 billion.

However, Wyndham has increased earnings guidance for 2013. The company now projects adjusted earnings per share within $3.66 - $3.76 in 2013, up from the previous estimate of $3.60 - $3.70 per share.

Our Take

We are encouraged by Wyndham's performance in the second quarter with double-digit earnings and revenue growth. With the rise in global travel demand, revival of the North American market and international expansion, the company continues to gain from its Vacation Ownership and Lodging businesses. The company recently raised its earnings guidance for 2013 which depicts the strength in its fundamentals.

Wyndham currently carries a Zacks Rank #3 (Hold). Another hotelier Starwood Hotels & Resorts Worldwide Inc. ( HOT ) is expected to report its second-quarter earnings results on Jul 25.

Some other hoteliers that are currently performing well include The Marcus Corporation ( MCS ) and Marriott Vacations Worldwide Corp. ( VAC ). Both the companies carry a Zacks Rank #2 (Buy).

STARWOOD HOTELS (HOT): Free Stock Analysis Report

MARCUS CORP (MCS): Free Stock Analysis Report

MARRIOT VAC WW (VAC): Free Stock Analysis Report

WYNDHAM WORLDWD (WYN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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