Cendant Corp. on Thursday reported that income from continuing operations fell 6% in the first quarter, to $186 million.
The company earned 22 cents per share, matching the per-share earnings a year earlier. The First Call analyst consensus was 19 cents.
Cendant said revenues rose 17%, to $1.3 billion, but expenses rose 24% to $994.5 million. One-time charges included $7 million for the termination of the proposed acquisition of RAC Motoring Services, and $1.7 million of integration related expense. Cendant incurred expenses from the use of excess cash to repurchase about 60 million shares of its common stock.
The diversified firm, which offers travel, real estate, and marketing services and owns a rapidly growing mortgage banking business, said net income before taxes and minority interest was $362 million, up 109% from the same period last year.
Cendant shares rose $2.1875, to $20.50.
Revenues from the mortgage unit-Cendant Mortgage of Mount Laurel, N.J.- totaled $93.2 million, up 19%. The increase was largely due to a 40% growth in originations, to $6.8 billion.
Cendant is a franchiser of hotels, including the Howard Johnson brand, and it owns the Avis car rental company and the Century 21, ERA, and Coldwell Banker real estate brokerages.
The mortgage unit originates loans using an "800" number. Its revenue per loan was lower, because of "increased competitive pressure." But the company said that profitability per loan benefited from more efficient processing technology.
Cendant Mortgage's average loan servicing portfolio was $45.4 billion, an increase of 47%. The mortgage unit also taps into cross-selling relationships with Cendant's real estate brokerage units.
