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wyndham worldwide corp com

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 Last: 4.18-1.76-29.63%
4:04pm 02/13/2009
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WYN 4.18, -1.76, -29.6%) said that it lost $1.36 billion, or $7.63 a share, a turn form a profit of $104 million, or 58 cents a share, in the same quarter a year before. The latest results include a non-cash charge of $1.3 billion to reduce the value of its goodwill related to the vacation ownership business. Knocking out that and other various one-time charges, the company would have earned a profit of 47 cents a share.

The average estimate of analysts polled by FactSet Research had been for the company to earn 38 cents a share.

Revenue for the quarter came in at $911 million, down 12% from $1.03 billion due largely to a "significant and deliberate slowdown of the vacation ownership business implemented during the quarter and increased loan loss provision, coupled with an adverse foreign currency effect due to the strengthening U.S. dollar," the company said.

In its lodging segment, revenue was down 3% to $170 million, even taking into account the acquisition of Microtel and Hawthorn. System-wide revenue-per-available room was down 6.4% factoring out currency fluctuation, with domestic off 9.3% and international down 1.6%.

In vacation exchange and rentals, revenue fell 11% to $250 million, while vacation ownership interest sales fell 11% to $432 million.

Looking ahead, the company said that its outlook is "subject to higher than normal levels of uncertainty," but that it expects adjusted earnings per share in the first quarter to be 35 cents to 40 cents, or $1.61 to $1.85 for the full year.

"This was a messy quarter for the company," wrote Steve Kent of Goldman Sachs in a note to investors. "Looking through all of the noise, we think the quarter was probably better that some might have feared, but Wyndham has lowered the outlook, and [a] share issuance will likely become an overhang for the stock."

He added that the company's focus "will most likely continue to be on timeshare and its future."

Although the company had previously announced that it would slow the pace of timeshare development, he said that "might not be enough...as some investors could choose to avoid investing in companies with any exposure to this business."

Shares were down $1.78 to close at $4.16 after cratering at $4.01. Last May, the issue was trading north of $24 before scraping all the way down to $2.55 in the November market meltdown.