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Cendant Guides Lower

Fourth-quarter earnings meet expectations, but the conglomerate lowers its first-quarter outlook.
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reported fourth-quarter results in line with its tempered forecast, but the consumer services conglomerate lowered its earnings projection for the first quarter amid weakness in the real estate market.

The company posted net earnings of $537 million, or 53 cents a share, including a $583 million gain related to certain discontinued operations. Excluding this gain, the company posted a loss from continuing operations of 4 cents a share. A year earlier, the New York-based company recorded a net profit of $357 million, or 33 cents a share.

Cendant said the loss from operations reflected a $256 million after-tax impairment charge related to its travel distribution services segment, which includes the Web site Orbitz, among other operations. Excluding charges, Cendant earned 23 cents a share, in line with its Dec. 13 projection and Thomson First Call's average analyst estimate.

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Revenue, meanwhile, rose to $4.32 billion from $4.03 billion, topping analysts' forecast of $4.16 billion.

In December, Cendant lowered its earnings forecast from a prior range of 23 cents to 26 cents a share, citing weakness in the travel services division. At the time, the company predicted earnings of 18 cents to 20 cents a share for the first quarter.

Cendant said Monday that it now expects first-quarter earnings of 11 cents to 16 cents a share, before charges. The company said the recent slowdown in the residential real estate market has hit its NRT real estate brokerage business. In addition, Cendant said it now expects corporate price increases within its vehicle rental business won't take effect until later in the year, which cut its earnings projection by 1 cent to 2 cents a share.

According to First Call, analysts have an average estimate for first-quarter earnings of 19 cents a share.

Cendant is set to break up into four independent companies. The company said it remains on track to spin off its real estate services and hospitality segments in the second and third quarters, respectively, and then separate its remaining travel distribution business from vehicle services in October.

Cendant shares recently changed hands in after-hours trading at $16.41, down 41 cents, or 2.4%.