Cendant Corp. Reports a Loss
Following Split Into Four Firms
Cendant Corp. swung to a loss in the second quarter on disposal of discontinued operations from its split into four separate companies.
The New York-based travel and real-estate conglomerate had a loss of $754 million, or 75 cents a share, compared with a profit of $387 million, or 36 cents a share, a year earlier. A one-time charge of $981 million for the sale of its Travelport division and costs related to the splitup of $49 million pushed Cendant to a loss. Earnings from continuing operations were $174 million, or 17 cents per share, down from $316 million, or 29 cents per share, a year ago. Revenue was up 2% to $4.26 billion.
Cendant reported its results after the close of regular trading. As of 4 p.m. composite trading yesterday on the New York Stock Exchange, the stock was at $1.91, off eight cents.
Cendant last month spun off its real estate and hospitality divisions to shareholders. Shares in Realogy, the new real-estate company, which owns brands such as Century 21, ERA and Coldwell Banker, are down 19% since they began trading on July 19. Shares in Wyndham Worldwide Corp., the new hospitality company, which owns brands including Days Inn, Ramada and Howard Johnson, are down 20% in the same time.
Shares in Cendant itself, which will include just a rental car group after finalization of the Travelport sale later this month, are down 9% since the spinoffs.
Realogy's revenue and earnings before interest, taxes, depreciation and amortization were hurt by the slowdown in the housing market. Revenue was off 7% in the second quarter while Ebitda dropped by 22%.
Wyndham's revenue is being buoyed by a strong hotel and time-shares market. Revenue jumped 15% in the hotel side, though Ebitda dropped 23% mainly because of a foreign tax charge.
Revenue at the car-rental group rose 10% on higher rates, but Ebitda dropped 13% as auto makers raised fleet prices.
Cendant will vote on changing its name to Avis Budget Group after the Travelport sale in completed. It is also proposing a 1-for-10 reverse stock split of common shares. The $4.3 billion in proceeds from the Travelport sale will be used to pay down Realogy and Wyndham debt.
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