Cendant Reports 4Q, Full-Year Earnings

NEW YORK –- Cendant Corp., the real estate and travel services giant that owns Avis and Budget, reported its fourth-quarter and year-end earnings, posting revenue gains during a period of transition, as the company prepares for the four-segment breakup of real estate, hospitality, travel distribution and vehicle rental.

Revenue for fourth quarter 2005 increased 7% over the same period in 2004, totaling $4.3 billion. Net income for the quarter jumped to $537 million from $357 million in fourth-quarter 2004.

For the year, Cendant brought in $18.2 billion in total revenue, up 9% from 2004. Net income from continuing operations was $869 million, down from $1.37 billion in 2004.

Vehicle Rental Services’ fourth-quarter earnings saw a 16% spike to $1.3 billion, up from $1.13 billion compared to 2004. Car rental revenue grew 18% worldwide due to a 17% increase in rental day volume. However, those gains were negatively impacted by higher fleet costs.

Total vehicle rental revenue for the year grew 13% to $5.3 billion compared to $4.7 billion in 2004.

Cendant lowered its first-quarter outlook to anticipated first-quarter earnings of 11 cents to 16 cents a share, on a core revenue growth of 6% to 8%. Responsible, in part, is the prospect that corporate price increases in its auto rental business won't take effect until later in 2006, as well as an expected moderate residential real estate climate.

The company said that it remains on track to complete the spin-offs of its real estate and hospitality businesses in the second and third quarters of 2006, respectively. The current forecast for the separation of travel distribution from auto rental is October of this year.

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