Fraud-mired direct-marketing giant Cendant today reported that third-quarter revenues from continuing operations were $1.46 billion, a 23 percent increase compared to $1.19 billion the year-ago quarter.
The company posted net earnings of 13 cents per share compared to 23 cents per share for the year-ago quarter. There were no Wall Street analysts' consensus figures available for Cendant for this period.
Cendant stock jumped 4.65 higher to 14.06 and was the fourth most active stock on the New York Stock Exchange this morning with 4.4 million shares trading hands. The stock closed more than 13 percent higher yesterday, and has traded as high as 41.69 and as low as 6.5 during the past 52 weeks.
Established last December through the $11 billion merger of HFS and CUC International, Cendant shocked the Street in April when it alleged "widespread and systemic" fraud at CUC. At the time, Cendant said the problems included "false entries which misrepresented the financial performance and condition" of CUC.
In September, Cendant restated its past results with the Securities and Exchange Commission. The revised results for 1995 through 1997 were recalculated to exclude $700 million in accounting fraud and errors at CUC International.
After disclosing the accounting irregularities in April, Cendant was slammed by many shareholder lawsuits. There was also turmoil in the board room, with former CUC chairman Walter Forbes purged and replaced as Cendant chairman by Henry Silverman, former chairman of HFS.
This week, the management reshuffling continued in the division where the fraud had occurred. Michael Monaco, a Cendant vice chairman and chief financial officer, was named chairman and CEO of the Alliance Marketing Division, as well as other appointments. Monaco will report to Silverman, Cendant's CEO, president, and chairman.
The Street, apparently happy about the company's changing course, pushed the stock 13.16 percent higher yesterday to close at 13.44. The stock has traded as high as 41.69 and as low as 6.5 during the past 52 weeks.
The company said that the adjusted third-quarter 1998 results reflect the impact of 6 cents per share for the cost of the investigation of its accounting irregularities at the former CUC International. The results also reflect a 4 cents per share cost related to the noncash write-off of Cendant's equity investment in NetGrocer, a online grocery delivery firm that has hit hard times.