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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Interval Leisure Group (Nasdaq: IILG ) were getting left behind today, falling as much as 15% after a disappointing quarterly earnings report.
So what: Adjusted EPS of $0.19 a share matched estimates, while revenues grew 9.8% to $117 million, in line with expectations as well. GAAP net income was breakeven on account of early non-cash debt extinguishment, but adjusted earnings were actually slightly below last year's total. Free cash flow for the first nine months of the year is down nearly 20% from a year ago. The company made strong gains in its Management and Rental segment but took a hit on gross margins, which led to the negative bottom-line growth. CEO Craig Nash said the company was making strides in its efforts to "diversify its fee-for-service offerings."
Now what: Shares bounced back after hitting lows near the open. Investors may be expecting more of the timeshare and vacation-rental specialist, especially considering its P/E of 23. With no bottom-line growth and a projected revenue increase in the single digits in the coming quarters, investors can probably find better places to put their money.
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