Cendant Posts Positive Results
For First Quarter After Loss
by Ryan Chittum
From The Wall Street Journal Online
May 02, 2006
Cendant Corp. swung to a profit in what could be its last full quarter before it begins to split itself up.
The New York-based travel and real-estate conglomerate earned $70 million, or seven cents a share, in the first quarter, compared to a loss of $82 million, or eight cents a share, a year ago. The loss a year ago was caused by a one-time restructuring charge. Revenues increased 5% to $4.2 billion.
Ronald L. Nelson, Cendant's chief financial officer, said in a statement that first-quarter results were bolstered by a better-than-expected performance by its real-estate division, now called Realogy, which it expects to spin off to its shareholders in June. Revenue in the unit edged up 1% to $1.425 billion, but earnings before interest, taxes, depreciation and amortization fell 25% to $121 million from $161 million a year ago.
Prices on homes sold by brokers under its brands such as Century 21 and Coldwell Banker were up 9% from a year ago, but closings fell 10%. "While home sales in California and Florida declined as forecasted, the balance of the country exhibited overall stability in a moderating environment," Mr. Nelson said.
Revenues rose in each of Cendant's five divisions, but Ebitda fell in all but one -- its timeshare sales and development businesses.
Cendant's travel-distribution unit continued to struggle with Ebitda falling 19% to $105 million from $129 million a year ago, even as revenues jumped 17% to $645 million. The company bought a series of online travel-agency companies, including Orbitz and ebookers, in the latter part of 2004, but has struggled to integrate them.
The company said this week it may try to sell the travel division to private-equity buyers for between $4 billion and $4.5 billion rather than spin it off to shareholders as planned. Analysts have said the move could be prompted by concern the division might not be as attractive to the public markets as a standalone company.
Email your comments to rjeditor@dowjones.com.
