Giant hotelier's forecast proves lackluster

Wyndham Worldwide Corp forecast 2008 earnings that disappointed Wall Street on Tuesday as the biggest US hotel company expects the first quarter to be burdened by deferred timeshare revenue.

The lackluster forecast, which sent Wyndham's shares down nearly 8 percent, comes as the booming lodging sector shows signs of slowing and follows lower third-quarter earnings at rivals Marriott International Inc and Starwood Hotels & Resorts Worldwide Inc.

In a presentation at its investor day in New York, Wyndham said it expected adjusted earnings per share of $2.02 to $2.13 for 2007, compared with $1.70 in the previous year.

For 2008, the operator of the Ramada, Days Inn, and Super 8 hotel chains expects its adjusted earnings to increase to a range of $2.23 to $2.38 per share.

Wall Street analysts on average were expecting Wyndham to post earnings of $2.12 per share for 2007 and $2.36 for 2008, according to Reuters Estimates.

For the first quarter of 2008, the company, which serves primarily leisure travelers through its large timeshare businesses and bargain hotel chains, expects adjusted earnings of 30 cents to 35 cents per share.

Wyndham said its first-quarter earnings forecast includes an expected burden of 12 cents to 15 cents a share because of the deferral of revenue from its timeshare business. The company defers revenue on timeshare sales for projects under construction.

Wall Street analysts had been expecting the company to post first-quarter earnings of 48 cents per share, according to Reuters Estimates.

Agencies

(China Daily 12/13/2007 page16)