Lodging company Wyndham Worldwide boosted its outlook for the year suggesting it will be able to charge higher rates, yet shares plunged Wednesday because its first-quarter performance fell shy of expectations.
The company, whose properties include Ramada, Days Inn and Super 8, earned $50 million, or 27 cents a share, in the first three months of the year. In the same quarter last year, the company earned $45 million or 25 cents a share.
Revenue fell 2 percent to $886 million from $901 million. The company said the prior year's revenue included a benefit of $67 million that had been deferred under business related to the company's vacation ownership program.
Analysts expected the company to earn 30 cents a share on revenue of $856.2 million, according to Thomson Reuters.
The hotel industry, which counts business travelers as a major portion of its clientele, has been hurt by the weak economy.
But CEO Stephen P. Holmes said business in the company's three units exceeded expectations and the company is seeing strong momentum.
Revenue in the lodging business fell 6 percent to $144 million, with revenue per available room falling 8.7 percent in constant currency.
The vacation exchange and rentals business posted a 5 percent increase in revenues to $300 million.
Vacation ownership interest sales rose 10 percent to $308 million.
Wyndham now said it expects revenues to range from $3.6 billion to $3.9 billion this year. That's up from its previous guidance of $3.5 billion to $3.9 billion.
It expects earnings per share to range from $1.56 to $1.71, up from a previous range of $1.48 to $1.69.
On average, analysts expect earnings per share of $1.60 on revenue of $3.66 billion.
Shares of Wyndham Worldwide Corp. fell $1.17, or 4.4 percent, to $25.46 in midday trading.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.