Revenue from real estate franchise, brokerage and relocation operations at Cendant Corp. jumped 31 percent from the second quarter of 2003 to the second quarter of 2004, rising to $1.81 billion, the company reported today. Meanwhile, its mortgage services segment, which includes mortgage and settlement services, saw second-quarter revenues slip 13 percent, from $394 million to $344 million from the second quarter of 2003 to the second quarter of this year.
Cendant officials announced earlier week that they are talking with a potential buyer of Cendant’s mortgage business and are pursuing a relationship that will provide for the company’s continuing participation in the mortgage business.
“The combination of prolonged strength in the residential real estate market and the early stages of a rebound in travel spending, together with solid execution on our strategies, enabled our core real estate and travel verticals to perform ahead of expectations,” Cendant CEO and president Henry R. Silverman said in a statement.
Silverman said during a first-quarter earnings discussion this year that Cendant is “not selling our mortgage company or any part thereof to Countrywide,” though rumors continue to swirl that Cendant may be considering a mortgage deal with Countrywide.
Cendant’s franchise brokerages include Century 21, Coldwell Banker, Coldwell Banker Commercial and ERA. Cendant is parent company of NRT Inc., the nation’s largest residential real estate brokerage company. NRT’s corporate-owned brands include The Sunshine Group, The Corcoran Group, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby’s. Combined the franchise and corporate-owned brokerages have about 12,000 offices and 200,000 sales associates.
Travel, hospitality and vehicle and marketing/financial services are also among Cendant’s business divisions.
A Cendant spokesman said that for purposes of transparency, Cendant’s real estate franchise and real estate brokerage operations were split into separate categories in a revenue table in the second quarter report. Revenue from real estate transactions at corporate-owned brokerages grew about 35 percent from the second quarter of 2003 to the second quarter of 2004, Cendant reported, from $1.14 billion to $1.54 billion. And total revenue also grew 35 percent, from $1.15 billion to $1.55 billion.
Also, the number of closed transaction sides grew 12 percent, from 128,750 to 144,384, and the average price per transaction increased from about $333,670 in the second quarter of 2003 to $409,810 in the second quarter of 2004, the report stated.
Through its franchise operations, Cendant had total royalty and marketing revenue of about $139.3 million and total revenue of about $144.3 million. Franchise operations produced about 512,250 closed transaction sides in the second quarter of 2004, compared with 445,740 closed transaction sides reported in the second quarter of 2003, and the average price per transaction was up 15 percent, from $170,240 to $195,350.
Company officials also announced financial projections for the full year. Real estate franchise and operations are expected to reach $6.1 billion to $6.2 billion in revenue this year, up from $5.26 billion in 2003. And Cendant’s mortgage services division is expected to generate $1.15 billion to $1.25 billion, down from $1.48 billion in 2003.
A conference call is planned at 11 a.m. EST Thursday, July 22, to discuss the second-quarter results. Investors can access the call online at http://www.cendant.com/ or by calling (719) 457-2661. A Web replay will be available online after the call, and a telephone replay will be available from 2 p.m. EST on July 22 through 8 p.m. EST July 29 at (719) 457-0820, access code 665526.
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