Wyndham 3Q Profit Down 27%, Sees 4Q Earnings Above Views

Wyndham Worldwide Corp.'s (WYN) third-quarter profit decreased 27% as the company's hotel and timeshare businesses continued to suffer amid broad industry weakness.

The company also expects fourth-quarter earnings of 35 cents to 38 cents a share. Analysts polled by Thomson Reuters expected 32 cents. It also reaffirmed its 2009 earnings forecast.

Shares were up 1.9% to $17 in premarket trading as the third-quarter results edged forecasts. The stock has more than doubled this year.

There have been some signs the lodging sector is stabilizing. Marriot International Inc. (MAR), Host Hotels & Resorts Inc. (HST) and Starwood Hotels & Resorts Worldwide Inc. (HOT) posted better-than-expected results in the latest quarter, supporting the view the worst may be over for the industry, although challenges remain. Wynn's latest results were generally in line with expectations.

The operator of the Ramada, Howard Johnson and Days Inn hotel chains posted a profit of $104 million, or 57 cents a share, down from $142 million, or 80 cents a share, a year earlier. Excluding restructuring and other impacts, earnings fell to 58 cents from 83 cents. Wyndham was expecting 53 cents to 57 cents.

Revenue slid 17% to $1.02 billion on continued weakness in the global lodging industry and unfavorable exchange rates. Analysts projected $1 billion.

At Wyndham's lodging business, total revenue per available room decreased 17%, dropping 16% in the U.S. and 22% internationally.

At its timeshare business, vacation-ownership interest sales fell 36%. Wyndham and its main timeshare rivals have dramatically pared their timeshare businesses over the past year to reflect weakening demand and falling prices. Wyndham, which owns 150 resorts globally, counts 830,000 time-share owners.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]