Hilton Grand Vacations (NYSE: HGV) reported Q3 EPS of $0.42, $0.03 worse than the analyst estimate of $0.45. Revenue for the quarter came in at $427 million versus the consensus estimate of $430.36 million.

• Diluted EPS was $0.42 and net income was $41 million for the third quarter.
• Adjusted EBITDA was $80 million for the third quarter.
• Total revenues were $427 million for the third quarter.
• Contract sales for the third quarter increased 11.7 percent from the same period in 2017.
• Net Owner Growth (NOG) for the 12 months ending Sept. 30, 2018, was 7.4 percent.
• Acquired a site in the Waikiki area of Honolulu, Hawaii, to develop 191-unit timeshare resort, which is the Company’s sixth resort in the Oahu market.
• Acquired timeshare inventory at the Crane Resort in Barbados, the Company’s first resort offering in the Caribbean.
• Completed $350 million timeshare securitization transaction at overall weighted average interest rate of 3.6 percent.
• Completed construction of Phase I of Ocean Tower in early October 2018.
• The Company will host an investor day in New York City on Dec. 4, 2018.
• Under ASC 606, deferrals related to Ocean Tower decreased third-quarter reported revenues and operating expenses compared to the previous accounting guidance. Under the previous accounting guidance, third quarter revenue, net income and adjusted EBITDA increased 13.4 percent, 44.2 percent and 13.8 percent respectively from the same period in 2017.

“We continue to lead the industry with year-to-date contract sales growth of 12.2 percent. By focusing on our customers and investing in their experiences, we delivered 7.4 percent net owner growth. The outstanding execution of our team members drove revenue growth across the business and adjusted EBITDA, excluding deferrals, increased 14 percent,” says Mark Wang, president and CEO, Hilton Grand Vacations. “Our club members were excited to hear about our first project in the Caribbean and our sixth project in Waikiki, and we are more enthusiastic than ever about the growth opportunities ahead. We’re looking forward to investor day in December when we will share more on the strength and sustainability of HGV’s business model and our ability to create long-term value for our shareholders.”

GUIDANCE:

Hilton Grand Vacations sees FY2018 EPS of $2.94-$3.04, versus the consensus of $2.99.

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