Wyndham Worldwide Corp. said yesterday its second-quarter earnings gained 2 percent, beating Wall Street's profit expectations, despite softness in its Hawai'i time-share operations.

Overall earnings rose to $98 million, or 55 cents per share, from $96 million, or 52 cents per share, a year ago. Excluding some items related to its 2006 spin-off from Cendant Corp., earnings totaled $94 million, or 53 cents per share, compared with $89 million, or 49 cents per share in the prior-year period.

The Parsippany, N.J.-based company's revenue rose 3 percent to $1.13 billion, from $1.1 billion in the second quarter of 2007.

Analysts surveyed by Thomson Financial forecast adjusted earnings of 47 cents per share on higher revenue of $1.18 billion.

In the company's vacation time-share business, sales rose 2 percent to $532 million, although revenues dipped 1 percent to $621 million due to a higher loan loss reserve. The firm's management also noted that some time-share income was accelerated into the second-quarter from the fourth-quarter due to shifts in construction timing and other factors.

In a conference call with investors, Chairman and Chief Executive Stephen Holmes said time-share interest is "holding up well," especially considering tighter consumer spending. He noted, however, that the Hawai'i and Las Vegas markets were more challenging, with sales to new customers falling in both locations.

"We do see a little bit of softness in tour flow in Hawai'i — actually Las Vegas tour flow was up a little bit. So it really wasn't a question of demand, it's a question of how many we can close," Holmes said.

LaFleur said that the Hawai'i and Las Vegas markets represent less than 20 percent of Wyndham's total sales.

Investors responded by boosting Wyndham shares 46 cents, or 2.6 percent, to $17.94 yesterday. During the past 52 weeks, the stock has fallen from a high of $36 last August to touch a low of $14.62 in mid-July.

In the hotel group, revenue per available room. or revpar, grew 1.4 percent as a surge in international growth offset a 3.7 percent drop in domestic results. Revpar, a gauge of a hotel's performance, has suffered throughout the industry as gas prices have surged, airlines reduced capacity and consumers cut spending.

Susquehanna Financial Group analyst Robert LaFleur said Wyndham's results highlighted the "diversity and stability" of its business model.

"As a franchisor in the hotel business, they're just not as affected by softer occupancy rates than hotel owners would be," LaFleur said.