Marriott Vacations drops as forecast disappoints

Marriott Vacations 4Q adj. results, revenue top Street's view; 2013 forecast disappoints

Associated Press

ORLANDO, Fla. (AP) -- Marriott Vacations Worldwide lost money in its fourth quarter, partly weighed down by lawsuit settlements and some charges.

Its adjusted results and revenue topped Wall Street's view, but its 2013 forecast disappointed. Shares of the timeshare company — which went public in November 2011 — slid nearly 13 percent in Thursday afternoon trading.

For the three months ended Dec. 28, Marriott Vacations Worldwide Corp. lost $7 million, or 22 cents per share. That compares with a profit of $8 million, or 23 cents per share, for the final quarter of 2011.

Stripping out lawsuit settlements, charges and other one-time costs, earnings were 54 cents per share.

Analysts surveyed by FactSet, on average, were expecting earnings of 46 cents per share.

Revenue climbed 3 percent to $499 million from $484 million. Wall Street expected revenue of $478.6 million.

North America contract sales rose 10 percent to $164 million. Contract sales were lower in the Asia Pacific region and the luxury and Europe segments.

Marriott Vacations' full-year net income was $16 million, or 44 cents per share. In the prior year the company lost $178 million, or $5.29 per share.

Adjusted earnings were $1.38 per share.

Annual revenue increased 3 percent to $1.65 billion from $1.61 billion.

North America contract sales climbed 12 percent to $578 million.

Looking ahead, Marriott Vacations expects 2013 adjusted earnings in a range of $1.77 to $2 per share.

Analysts were predicting earnings of $1.76 per share, on average, with estimates ranging from $1.64 to $1.93.

But the company said during a conference call that it expects fiscal 2013 adjusted free cash flow between $35 million and $50 million. Its 2012 adjusted free cash flow was $132 million.

Marriott Vacations said during the call that its 2012 free cash flow benefited from the company investing less to bring its inventory down. It is also dealing with a Marriott rewards program liability.

Marriott Vacations also said that it expects total contract sales for the year to be flat to up 5 percent from the prior year's $688 million in total contract sales. In 2012, total contract sales climbed 2 percent.

On Tuesday Marriott International Inc. reported a better-than-expected fourth-quarter profit, driven by an increased number of rooms in the hotel company's portfolio and higher occupancy and room rates.

Shares of Marriott Vacations fell $5.87, or 12.8 percent, to $39.86 in heavy afternoon trading. The stock has traded between $22.47 and $47.33 in the past 52 weeks.

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