Realogy Loss Widens as Expenses Wipe Out Revenue Increase
Realogy Holdings Corp. (RLGY), owner of brokerage brands Coldwell Banker and Century 21, reported a wider third-quarter loss as expenses overshadowed sales gains.
The net loss was $34 million, compared with $28 million a year earlier, Parsippany, New Jersey-based Realogy said in a statement today. The third quarter results included $187 million of interest expense and $42 million of depreciation and amortization. Revenue increased 11 percent to $1.3 billion.
Realogy went public last month as the U.S. property market started to climb out of the worst crash since the Great Depression. The company raised $1.2 billion in its initial public offering, including an over-allotment, and planned to use proceeds of the sale to help reduce debt.
“The early-stage housing market recovery that we spoke of in the first two quarters of the year continued in the third quarter of 2012,” Chief Executive Officer Richard Smith said in the statement. “Once again, we experienced strong year-over- year gains in home-sale units and average home sale price as the housing market continued its recovery.”
Realogy, which also provides relocation and title and settlement services, said its franchise group’s number of transaction customers increased 5 percent in the third quarter from a year earlier, while the NRT brokerage unit’s jumped 12 percent. Realogy Franchise Group’s average home sale price climbed 9 percent to $218,866, the company said.
The S&P/Case-Shiller index of home prices in 20 U.S. cities rose 2 percent in August from a year earlier, the biggest gain since July 2010, the group said this week.
Apollo Global Management LLC (APO), the New York-based private- equity firm run by Leon Black, acquired Realogy in 2007 in the largest leveraged buyout of a real estate services firm on record and remains the company’s largest shareholder. Realogy has about 13,500 franchised and company-owned real estate brokerage offices with 239,500 sales representatives, according to the statement.
Realogy rose 1.2 percent to $35.96 today at the close of New York trading. The shares have gained 33 percent since their IPO at $27 each.
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