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Wyndham Worldwide Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 25, 2012 10:13AM
Wyndham Worldwide Corp. (WYN) filed Quarterly Report for the period ended 2012-06-30. Wyndham Worldwide Corporation has a market cap of $7.41 billion; its shares were traded at around $49.86 with a P/E ratio of 19.2 and P/S ratio of 1.7. The dividend yield of Wyndham Worldwide Corporation stocks is 1.8%. Wyndham Worldwide Corporation had an annual average earning growth of 7.3% over the past 5 years.
Highlight of Business Operations:Net revenues and EBITDA decreased $13 million (3.6%) and $24 million (22.6%), respectively, during the second quarter of 2012 compared with the second quarter of 2011. EBITDA reflects the absence of a $31 million net benefit resulting from a refund of value added taxes recorded during the second quarter of 2011, partially offset by the absence of $7 million of costs related to organizational realignment initiatives recorded during the second quarter of 2011. A stronger U.S. dollar compared to other foreign currencies unfavorably impacted net revenues and EBITDA by $17 million and $2 million, respectively.
Gross sales of VOIs, net of WAAM 1.0 sales increased $50 million (12.7%) driven principally by a 6.0% increase in VPG, a 5.5% increase in tour flow and $12 million of sales from WAAM 2.0, which was implemented during the second quarter of 2012. WAAM 2.0 enables us to acquire and own completed timeshare units close to the timing of the sales of such units and to offer financing to the purchaser. The increase in VPG is attributable to higher pricing due to better yield management and improved close rates resulting from our credit pre-screening program, while the change in tour flow reflects our focus on marketing programs directed towards new owner generation. Our provision for loan losses increased $20 million primarily as a result of the increase in gross VOI sales and higher default rates as compared to the prior year.
Net revenues from consumer financing decreased $1 million and EBITDA decreased $2 million compared to the same period in the prior year due to a lower average portfolio balance of contract receivables, partially offset by higher weighted average interest rates earned on such receivables. EBITDA further reflects slightly higher consumer financing interest expense resulting from $176 million of increased average borrowings on our securitized debt facilities due to higher advance rates, partially offset by a reduction in our weighted average interest rate on our securitized debt to 5.0% from 5.3%. As a result, net interest income margin decreased during the second quarter of 2012 to 77% from 78% during the second quarter of 2011.
Net revenues increased by $79 million (23.3%) and EBITDA increased $31 million (33.7%) during the six months ended June 30, 2012 compared to the same period last year. Excluding the impact of a $13 million non-cash impairment charge during the first quarter of 2011, EBITDA increased $18 million (17.1%) compared to the same period last year.
Net revenues and EBITDA decreased $7 million (1.0%) and $22 million (11.1%), respectively, during the six months ended June 30, 2012 compared with the same period during 2011. EBITDA reflects the absence of a $31 million net benefit resulting from a refund of value added taxes recorded during the second quarter of 2011, partially offset by the absence of $7 million of costs related to organizational realignment initiatives recorded during the second quarter of 2011 and a $2 million benefit related to the reversal of an allowance associated with a previously divested asset. A stronger U.S. dollar compared to other foreign currencies unfavorably impacted net revenues and EBITDA by $23 million and $4 million, respectively.
Stocks Discussed: WYN,