How Marriott Vacations Disappointed on Earnings

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Marriott Vacations Worldwide Corp. (NYSE: VAC) reported its fiscal third-quarter financial results before the markets opened on Thursday. The company said that it had $0.96 in earnings per share (EPS) on $407 million in revenue. The same period of last year reportedly had EPS of $0.82 and $407.14 million in revenue. Thomson Reuters consensus estimates had called for $1.15 in EPS and revenue of $446.83 million.

Total company vacation ownership contract sales were $169.8 million. That was $10.1 million, or 6.3%, higher than the third quarter of last year.

Rental revenues totaled $73.8 million, a $2.3 million decrease from the same period last year. At the same time, Resort management and other services revenues totaled $75.5 million, a $1.7 million increase from the third quarter of 2015.

The company did not repurchase any shares of its common stock in the third quarter due to limitations resulting from the accelerated share repurchase arrangement entered into during the second quarter, which effectively accelerated third-quarter repurchases.

Year to date, the company returned nearly $190 million to its shareholders through the repurchase of 2.8 million shares for $163.4 million and more than $26 million in dividends paid.

Stephen P. Weisz, president and chief executive, commented:

We continued to execute our growth strategy in the third quarter.  Contract sales in our key North America and Asia Pacific segments were up 8.3 percent in the quarter, an acceleration of the year-over-year growth that began near the end of the second quarter.  Our sales growth in the quarter came not only from the continued ramp-up of sales at our new North America and Asia Pacific sales centers, but also from sales improvement at our existing sites. With the momentum we have seen in our new sales centers during the third quarter and our fourth quarter tour activations well ahead of this time last year, we remain confident in our growth strategy and the solid foundation we are building for continued sales growth going into 2017.

On the books, Marriott Vacations cash and cash equivalents totaled $174.76 million at the end of the quarter, down from $177.06 million at the end of the previous fiscal year.

Shares of Marriott Vacations were last seen down more than 9% at $62.46, with a consensus analyst price target of $82.00 and a 52-week trading range of $45.95 to $80.27.