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Wyndham shares plunge after charges announced

cirkus

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AP
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.
 

lprstn

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Ok, in all fairness...isn't just about everyone's stock dropping...I mean come on ... banks are needing bailouts...
 

bookworm

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The negative here is certainly the likely loss of new locations that were rumored. Also, places like the Poconos that need more new units may not get them. What has been great about Wyndham is the new locations they are constantly opening up to existing owners but that can't last in this economy. Hopefully by cut back they don't really mean end.
 

mtribe

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The negative here is certainly the likely loss of new locations that were rumored. Also, places like the Poconos that need more new units may not get them. What has been great about Wyndham is the new locations they are constantly opening up to existing owners but that can't last in this economy. Hopefully by cut back they don't really mean end.
I would bet that anything already under way will continue so those we know about will probably go through. Overall I look at this as a positive from the Worldmark perspective. Delayed development means that less new resorts will come in at higher credit values and the dilution of our club will be slowed. Don't get me wrong these are very difficult times and it is nothing to be happy about but slowed development is a small silver lining in my eyes.

Mike
 

Bill4728

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More Wyndham restrucuring?

street talk Blog.com said:
Wyndham Vacation Ownership, with approximately 145 vacation ownership resorts serving over 800,000 owners, will refocus its sales and marketing efforts on consumers with higher credit quality, and consequently, will decrease the level of timeshare development and enhance the cash flow from the business unit. These initiatives will begin in the fourth quarter 2008.
 

joestein

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They have been building resorts at an unbelivable rate these past couple of years. I think they have 9 new resorts (3 already opened and 6 to open next year). That is a much higher building rate than they have in the past.


Joe
 

rhonda

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