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Wyndham shares plunge after charges announced
Monday October 6, 3:48 pm ET Wyndham shares plunge with market after changes announced for timeshares, restructuring
NEW YORK (AP) -- Shares of Wyndham Worldwide Corp. plunged with the broader market on Monday after the hotel company announced changes to its timeshare business and restructuring charges.
Wyndham shares dropped 87 cents, or 6.9 percent, to $11.83 in afternoon trading. They hit an all-time low of $11.05 earlier in the session.
Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality and cut back on timeshare development.
Wyndham said its timeshare business "performed well" in the third quarter with slight year-over-year gains in sales, tours, and volume per guest. The company said its consumer finance portfolio also continues to perform within expectations.
"Right or wrong, timeshare spooks investors," said Thomas Weisel Partners analyst Jake Fuller, who maintained an "Overweight" rating on the stock.
Wyndham's stock has dropped more than 20 percent since Marriott International Inc. said Thursday that its timeshare sales have dried up amid the tight credit market and cutbacks in business and consumer spending.
Friedman Billings Ramsey analyst C. Patrick Scholes, however, said he does not view Wyndham's restructuring as a positive in the near term. "This is especially the case during a period of decelerating leisure trends and a nervous market," he said.
Scholes maintained a "Market Perform" rating on the stock.
Wyndham expects to post pretax charges of $7 million, or 2 cents per share, in the third quarter for job cuts and restructuring. The company, which has more than 33,000 workers globally, did not specify how many jobs it was eliminating.
The company expects fourth-quarter charges to range from $10 million to $15 million and charges in the first quarter of 2009 to range from $5 million to $10 million.
Wyndham anticipates recouping its investment by the end of 2010.
The company also maintained its third-quarter adjusted earnings guidance of 80 cents to 82 cents per share. Analysts polled by Thomson Reuters expect earnings of 80 cents per share.
Meanwhile, The Dow Jones industrials plunged as much as 800 points on Monday, as investors realized that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets.
Wyndham is scheduled to release its third-quarter results on Oct. 30.
Monday October 6, 3:48 pm ET Wyndham shares plunge with market after changes announced for timeshares, restructuring
NEW YORK (AP) -- Shares of Wyndham Worldwide Corp. plunged with the broader market on Monday after the hotel company announced changes to its timeshare business and restructuring charges.
Wyndham shares dropped 87 cents, or 6.9 percent, to $11.83 in afternoon trading. They hit an all-time low of $11.05 earlier in the session.
Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality and cut back on timeshare development.
Wyndham said its timeshare business "performed well" in the third quarter with slight year-over-year gains in sales, tours, and volume per guest. The company said its consumer finance portfolio also continues to perform within expectations.
"Right or wrong, timeshare spooks investors," said Thomas Weisel Partners analyst Jake Fuller, who maintained an "Overweight" rating on the stock.
Wyndham's stock has dropped more than 20 percent since Marriott International Inc. said Thursday that its timeshare sales have dried up amid the tight credit market and cutbacks in business and consumer spending.
Friedman Billings Ramsey analyst C. Patrick Scholes, however, said he does not view Wyndham's restructuring as a positive in the near term. "This is especially the case during a period of decelerating leisure trends and a nervous market," he said.
Scholes maintained a "Market Perform" rating on the stock.
Wyndham expects to post pretax charges of $7 million, or 2 cents per share, in the third quarter for job cuts and restructuring. The company, which has more than 33,000 workers globally, did not specify how many jobs it was eliminating.
The company expects fourth-quarter charges to range from $10 million to $15 million and charges in the first quarter of 2009 to range from $5 million to $10 million.
Wyndham anticipates recouping its investment by the end of 2010.
The company also maintained its third-quarter adjusted earnings guidance of 80 cents to 82 cents per share. Analysts polled by Thomson Reuters expect earnings of 80 cents per share.
Meanwhile, The Dow Jones industrials plunged as much as 800 points on Monday, as investors realized that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets.
Wyndham is scheduled to release its third-quarter results on Oct. 30.
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