UPDATE 3-Wyndham profit beats view; eyes brand acquisitions
* Q3 EPS ex-items 58 cents; Street view 56 cents
* Revenue falls 17 pct; expenses down 18 pct
* Shares up 1.5 percent (Recasts; adds comments from conference call, byline; updates shares)
By Deepa Seetharaman
NEW YORK, Oct 28 (Reuters) - Wyndham Worldwide Corp (WYN.N), which franchises more than 7,000 hotels, raised its 2009 earnings forecast on a brightening economy and said it was looking for opportunities to add more brands to its stable of hotels.
The company boosted its full-year EBITDA outlook by about 2 percent and forecast 2009 revenue and fourth-quarter results above analysts' estimates.
Wyndham also reported better-than-expected third-quarter profit, and its shares rose 1.5 percent to $16.94 in morning trade on the New York Stock Exchange.
Chief Executive Stephen Holmes said the company is looking to invest in its hotel group and said Wyndham could acquire more brands and add rooms, given current plentiful opportunities to buy distressed properties.
"We do believe there will be a significant restructuring of the lodging industry over the next 12 to 18 months," he said during a conference call with analysts.
Holmes added that there was a "huge" opportunity for adding rooms through conversions. He did not discuss the size or value of potential acquisitions.
Rising unemployment and corporate cost-cutting have sapped travel demand in the past year, sending room rates and occupancies lower. Last year, Wyndham announced it would shrink its timeshare unit as demand for that segment fell.
Mid-scale and economy hotel chains, like the ones Wyndham operates, have held up better than their luxury counterparts amid the downturn. But Holmes was cautious about calling a bottom.
"We can't call it a real uptick yet," he said in an interview with Reuters. "Obviously we're still seeing RevPAR (revenue per available room) declines."
THIRD-QUARTER EARNINGS
Wyndham reported third-quarter net income of $104 million, or 57 cents per share, down from $142 million, or 80 cents per share, a year earlier.
Excluding one-time items, it earned 58 cents per share. Analysts, on average, had expected 56 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 17 percent to $1.02 billion, while expenses fell 18 percent.
"We're still seeing signs of stabilization," Holmes said in the interview. "On the hotel side, to give one indicator, we see occupancies kind of flattening out."
Wyndham, which operates the Days Inn and Ramada hotels, said revenue per available room slumped 17 percent in the third quarter.
For the fourth quarter, it now expects earnings of 35 cents to 38 cents a share, above analysts' average estimate of 32 cents.
It expects full-year earnings before interest, taxation, depreciation and amortization (EBITDA) of $775 million to $825 million, up from a previous forecast of $760 million to $810 million. Analysts, on average, expect $782.12 million.
The company forecast 2009 revenue of $3.5 billion to $3.9 billion, compared with analysts' average estimate of $3.6 billion.
The company said 2010 earnings should be roughly in line with 2009 results. (Reporting by Deepa Seetharaman; Editing by Dave Zimmerman and John Wallace)
