Marriot Vacations Worldwide Inc. (VAC) , the $1.65 billion leader in vacation ownership, reported earnings for its fiscal third quarter on Thursday, much to the delight of investors who in turn sent the stock much higher.
For the third quarter of 2013, Marriot Vacations reported a profit of $25 million, or $0.67 cents a share on revenue of $412 million for the period ended on Sept. 6, outperforming results from the prior year's Q3, when the company netted $5 million, or $0.12 cents a share on the revenue of $400 million. Furthermore, Marriot's fiscal performance during the quarter handily beat consensus expectations for earnings-per-share of $0.39 cents on total revenue of $400 million.
The company also used the occasion to raise guidance for the full year, with eps estimated in a range of $2.21 to $2.37, a significant improvement on the $1.94 to $2.20 range that was given in July.
Along with its earnings statement, the company also announced a 3.5 million share buyback plan while leaving specific details unclear, saying only that the timing of the move will be determined by market conditions.
Marriot Worldwide Inc., which used to operate as a division of Marriott International, established itself as its own publicly entity in November 2011. The company now focuses on vacation ownership and specializes in selling timeshares to vacationers.
The financial crisis of 5 years ago took a large bite out of both the tourism and vacation industries, but Marriott has distinguished itself from its peers by turning a profit all the same. The company's timeshare segment saw sales grow 13 percent from the prior year period to $162 million, a number that represents just shy of 40 percent of the company's overall revenues. Rental sales, another significant portion of the overall revenue, brought in $65 million in Q3, a 14 percent increase from the prior year.
Analysts at Sidoti rated the stock as a “buy”, with an average target price of $51.43 on August 23rd. Shares for Marriot Vacation opened up on Thursday with a price of $47.25, and grew over 6 percent shortly before markets closed. The stock is up some 6 percent throughout 2013.