Hilton Grand Vacations (HGV) Misses Q2 EPS by 1c, Revenues Miss; 'Raises Guidance'

Hilton Grand Vacations (NYSE: HGV) reported Q2 EPS of $1.10, $0.01 worse than the analyst estimate of $1.11. Revenue for the quarter came in at $563 million versus the consensus estimate of $586.12 million.

“The solid execution of our teams in the U.S. and Japan has delivered consecutive quarters of strong operating performance, including contract sales, Net Owner Growth and strategic deployment of capital,” says Mark Wang, president and CEO, Hilton Grand Vacations. “As a result, we are raising guidance based on the momentum we’re experiencing across the company and from sales of our new Ocean Tower project, which demonstrates how the investments we’re making position us well to accelerate continued growth.”

Outlook

Full-Year 2018

• 2018 guidance reflects the modified retrospective adoption of ASC 606 and may not be comparable to prior year presentations.
• Net income is projected to be between $285 million and $300 million.
• EPS is projected to be between $2.91 and $3.06.
• Adjusted EBITDA is projected to be between $489 million and $504 million, which includes $67 million of net deferral impact related to a project under construction in 2017, due to the adoption of ASC 606.
• Full-year contract sales are expected to increase between 9 and 11 percent.
• Fee-for-service contract sales are expected to be between 50 and 55 percent of full-year contract sales.
• Free cash flow is projected to be between ($240) million and ($280) million.
• Adjusted free cash flow is projected to be between ($20) million and ($80) million.(1)
• Inventory spending, which is included in cash flow from operating activities, is projected to be between $510 million and $530 million. In addition to ongoing and previously announced projects and initiatives, this amount includes approximately $140 million of anticipated spending on new projects during 2018 that have not yet been announced.

Adjusted free cash flow represents free cash flow less non-recourse debt activity, net.

GUIDANCE:

Hilton Grand Vacations sees FY2018 EPS of $2.91-$3.06.

For earnings history and earnings-related data on Hilton Grand Vacations (HGV) click here.

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