Cendant ( CD) on Wednesday posted stronger-than-expected earnings and wrote off its investment in accounting-scandalized Homestore.com ( HOMS).
Cendant shares, which rose 22 cents during regular trading Wednesday to $15.57, moved little in after-hours trading. The real estate and travel conglomerate reported adjusted earnings per share of 23 cents for the fourth quarter ended Dec. 31, better than the 21-cent consensus of analysts surveyed by Thomson Financial/First Call and up from 22 cents in the fourth quarter of 2000. Revenue for the quarter came in at $2.6 billion, up from $1.7 billion in the corresponding quarter a year earlier and edging out the $2.5 billion three-analyst mean on First Call. Cendant's adjusted fourth-quarter earnings per share, to be sure, included plenty of adjustment from its actual loss of $307 million, or 31 cents per share. The biggest piece is an after-tax noncash charge of $285 million, or 29 cents per share, related primarily to the writeoff of Homestore.com, which said in December that it had launched an inquiry into its accounting practices and said last month that it would restate online advertising revenue. Other cash and noncash charges related to items such as job cuts, integration of acquisitions, lower values for mortgage servicing rights, and litigation settlement. The adjusted EPS also excluded a 2-cent after-tax loss related to the company's proportionate ownership of Homestore.com. Like other companies with extensive operations, Cendant has been hit in recent days by a generalized worry about full disclosure of off balance sheet operations. Last week, the company posted information about its investments in affiliates on its Web site to quell such investor fears.