Business Travel Bolsters Wyndham

Jul 30, 10 | 1:54 am

By Jacquelyn Smith

Hotel operator raises guidance in what's shaping up as a comeback season for the industry.

Wyndham Worldwide reported better-than-expected results Wednesday with net income of $95 million, or 51 cents per share, versus $71 million, or 39 cents per share a year ago. The results, which exclude a one-time charge of $1 million from an acquisition of the Tryp hotel brand, exceeded the company's anticipated EPS of 38 cents to 42 cents for the second quarter. Revenues totaled $963, up from $920 last year.

The hospitality company beat The Street on the top and bottom lines, passing the consensus estimate for Wyndham Worldwide ( WYN - news - people ) to post earnings of 40 cents per share on $940.2 in revenue.

"I think the general expectation was that we wouldn't get any dramatic surprises, but Wyndham did top expectations," Soleil-Travel Wise Research analyst Jake Fuller says.

The 5% revenue increase from last year was driven by continued sales momentum in Wyndham's three segments. Lodging rose 2% to $178 million due to demand growth across the company's 7,160 hotel properties. The vacation exchange and rentals division jumped to $281 million, and vacation ownership revenues totaled $505 million for the second quarter ended June 30.

Wyndham's CEO Stephen P. Holmes said the company's continued strong operating performance combined with a lower tax rate drove management to increase full-year guidance.

"Wyndham raised guidance for the back half of the year while others, such as Marriott ( MAR - news - people ) and Starwood ( HOT - news - people ), lowered theirs," says Fuller. "All three issued strong results this quarter. Marriott and Starwood's profits were driven largely by an increase in business travel, and for Wyndham, their time-share and travel exchange businesses were big contributors."

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Source: forbes.com