PARSIPPANY, N.J. (
) -- Shares of
soared more than 8% Wednesday afternoon after the hotelier beat quarterly financial expectations and raised its top- and bottom-line guidance for 2010.
It was "an excellent quarter by all measures," noted Hudson Securities analyst Robert A. LaFleur. "We're still fans and would buy the stock aggressively."
Based on continued strengthening in its operating performance and a lower overall tax rate, the hospitality company said it now expects to earn between $1.78 and $1.88 per share on revenue in a range of $3.7 billion to $4 billion for the year. Wyndham's previously announced outlook called for earnings in a range of $1.56 to $1.71 per share on revenue of $3.6 billion to $3.9 billion. The consensus call among Wall Street analysts is for full-year earnings per share of $1.68 on revenues of $3.77 billion.
Investors cheered the upwardly revised outlook and 11-cent earnings beat, bidding shares of Wyndham up 8.6% in afternoon trading.
Shares changed hands at rapid speed with 6.2 million shares in play compared with the 30-day trailing average volume of just 2.6 million shares.
The beat-and-raise echoed the actions of a roster of fellow hotel operators recently, namely
Starwood Hotels & Resorts
, lodging real estate investment trust
Host Hotels & Resorts
for the second quarter, and said recovering occupancy rates will help drive future earnings.
Host, which owns and operates hotels under the Four Seasons, W and Ritz-Carlton brands, said revPAR, or revenue per available room,
thanks to higher prices paid by business travelers.
Similarly, Marriott said earlier this month it enjoyed the benefit of increased business travel bookings coupled with higher revPAR and daily room rates for the
In Wyndham's recent quarter, system-wide revPAR actually declined 1.2%, but sales momentum across the company's three business segments -- lodging, vacation rentals and vacation ownership -- helped push total revenues up 5% year-over-year to $963 million, easily beating expectations for sales of $940.2 million.
Profits came in at $95 million, or 51 cents per share, topping estimates for earnings of $77.8 million, or 40 cents per share.
RevPAR rose in June, the company said, and it continued to see "meaningful improvement" during the first three weeks of July. That strengthening led Wyndham to raise its revPAR expectations for 2010 to growth as much as 3%, compared with its previous estimates for flat or a 3% decline in revPAR.
Marriott forecast revPAR growth between 4% and 6% this year, while Starwood expects growth in the key metric to jump between 7% and 9%.
Shares of Marriott gained 0.3% Wednesday afternoon while Starwood added 1.9%. Host shares edged 0.2% lower.
-- Reported by Miriam Marcus Reimer from New York.
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