Wyndham Q3 results on track despite hurricanes
RCI’s parent company Wyndham Worldwide Corporation has announced its results for the three months ended 30 September 2017. The results were in line with its prior expectations despite recent hurricanes negatively impacting the company’s operations.
Third quarter revenues were $1.6 billion, up 4% compared with the prior-year period. Full reconciliations of GAAP results to non-GAAP measures for all reported periods appear in the tables to this press release.
Net income in the third quarter of 2017 was $203 million compared with $196 million for the third quarter of 2016. Diluted earnings per share (EPS) increased 11% to $1.97, versus $1.78 in the prior-year period.
Adjusted net income for the third quarter of 2017 was $209 million or $2.03 per diluted share, compared with $207 million or $1.89 per diluted share in the third quarter of 2016.
Adjusted results exclude restructuring and separation costs and other items. Third quarter earnings benefited from the growth in revenues, partially offset by higher year-over-year interest, depreciation and variable compensation expenses along with the impact of Hurricanes Irma and Maria. The increase in adjusted diluted EPS also reflects the benefit of the company’s share repurchase program.
Third quarter EBITDA was $422 million, compared with $402 million in the prior-year period. Adjusted EBITDA was $436 million, compared with $423 million in the third quarter of 2016. Results primarily reflect the growth in revenues, partially offset by higher variable compensation expenses and the hurricane impacts.
Weather events in the third quarter had an unusually pronounced effect on operating results. In particular, the company estimates that the third quarter hurricanes reduced revenues, net income and EBITDA by $13 million, $6 million, and $9 million, respectively. The reductions primarily reflect the temporary closure of vacation ownership sales centres in the Caribbean and Florida, the closure of portions of the company’s Wyndham Rio Mar hotel in Puerto Rico, and reduced timeshare exchanges due to travel disruptions. Two of the company’s vacation ownership sales centres in the Caribbean remain closed.
Vacation ownership revenues were $773 million in the third quarter of 2017, compared with $744 million in the third quarter of 2016, an increase of 4%. The increase reflects a 7% increase in gross VOI sales as well as higher consumer financing revenues, even though the third quarter hurricanes negatively impacted VOI sales.
Tour flow increased 7%, driven by increased tours to new owners. Volume per guest (VPG) declined 1%, primarily reflecting a 16% increase in sales in North America to new owners, which produce a lower VPG.
Stephen P. Holmes, chairman and CEO, said: “Our team’s sharp focus on executing against our strategic and operating plans allowed us to deliver solid growth in line with our prior projections.
“While the barrage of recent hurricanes negatively impacted our results, our efforts to drive revenue and control costs successfully mitigated their impact in the quarter. I am especially proud of how our employees and affiliates in affected areas have served our guests throughout a difficult period.
“Despite the weather-related challenges in the quarter, we generated a strong increase in new timeshare owners and year-over-year growth in our earnings per share. We have also strengthened our presence in the midscale hotel segment with the addition of the AmericInn brand and its 200 franchised hotels in October.
“Furthermore, we have increased our share repurchase authorisation to reflect our continued focus on returning cash to shareholders, and we are working tirelessly to execute our previously announced separation into two publicly-traded companies.”