What happened

Shares of Marriott Vacations Worldwide (NYSE:VAC) gained 11.7% in November, according to data provided by S&P Global Market Intelligence, despite the time-share operator reporting quarterly earnings that came in below expectations. Investors were more focused on the company's long-term outlook, and the progress made integrating a major acquisition, than they were on short-term results.

So what

Early in the month, Marriott Vacations reported third-quarter adjusted earnings of $1.97 per share, short of the $2.03-per-share consensus, despite revenue of $1.14 billion -- $20 million ahead of what analysts expected. The quarterly results were impacted by Hurricane Dorian, which made its way up the East Coast in August, causing mandatory evacuations and sales shutdowns at a number of properties.

The company estimates that the hurricane lowered contract sales in the quarter by about $7 million.

A hotel room being prepared for a guest

Image source: Getty Images.

Storm issues aside, there was a lot to like about the results. Vacation ownership contract sales were up 5% year over year, and active tours scheduled to arrive in 2020 increased 19% compared to the same time last year. Marriott Vacations is also making steady progress integrating its 2018 acquisition of ILG, owner of brands including Hyatt Vacation, Vacation Resorts International, and Vistana Signature Experiences.

On a post-earnings call with investors, CEO Steve Weisz said the ILG integration is "progressing well." Marriott Vacations expects about $60 million of annualized cost cuts by year's end, and $125 million worth by the end of 2021.

Now what

Marriott Vacations is now up more than 70% year to date, but the shares lost nearly half of their value in late 2018 as investors fretted that a recession was imminent and vacation spending would be curtailed. Taking a broader view, shares are still 10% below where they started 2018.

The stock's performance this year has been impressive, but there still appears to be room for the stock to run. Marriott Vacations expects full-year earnings of between $7.67 and $8.16 per share, potentially ahead of the $7.88-per-share estimate going into earnings, and full-year adjusted free cash flow of $440 million to $490 million. As the ILG integration continues, management should have ample financial firepower to support (and perhaps raise) the company's dividend -- which currently yields about 1.5% -- and to continue its sales effort.

Assuming the U.S. economy can remain steady and consumer confidence doesn't collapse, Marriott Vacations appears well-positioned for continued growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.