Wyndham boosts 2010 outlook

NEW YORK (Reuters) - Wyndham Worldwide Corp (WYN.N), franchiser of Days Inn, Ramada and Super 8 hotels, reported higher-than-expected earnings and sales on Wednesday, and boosted its 2010 earnings outlook.

For the second quarter, Wyndham reported net income of $95 million, or 51 cents per share, compared with $71 million, or 39 cents per share, a year before.

The company saw a one-time charge of $1 million from its acquisition of the Tryp brand. This was offset by a tax credit stemming from Wyndham's spin-off from Cendant Corp.

Excluding these charges, the company posted an adjusted profit of 51 cents per share, besting the average analyst estimate of 40 cents per share, according to Thomson Reuters

I/B/E/S.

Overall revenue rose 5 percent to $963 million. Revenue from its timeshare business, which makes up about half of the company's annual revenue, rose 8.1 percent.

"Based on what we're seeing, we're seeing a strengthening and some momentum building," Chief Executive Stephen Holmes said in an interview. "We have continually said, the recovery will be gradual."

Wyndham also lifted its 2010 earnings outlook, citing better results in its three business and a revised tax structure.

Wyndham's timeshare segment makes up about half its overall annual revenue, while vacation exchange and rentals make up 31 percent. The bulk of Wyndham's more than 7,100 hotels fall into the low-cost or economy segment.

"Each one of our businesses was ahead of our expectations and we felt that momentum would help us through the rest of the year," Holmes said.

The company also changed its tax profile, reflecting a restructuring of its international businesses. Wyndham expects to pay a tax rate of 35.5 percent for 2010, down from about 39 percent in 2009, Holmes added.

The company now projects full-year earnings per share between $1.78 and $1.88, beating out analyst expectations of $1.68 per share.

Wyndham predicts revenue per available room will rise as much as 3 percent, compared with the previous projection of flat to down 3 percent.

(Reporting by Deepa Seetharaman; Editing by Derek Caney and Gerald E. McCormick)