Future looking brighter for Cendant
The direct marketer and franchiser says its expectations for the fourth quarter and next year are in line with analysts' estimates.
Analysts are expecting the company to earn 18 cents to 20 cents per share for the fourth quarter, and $1 to $1.13 per share for 1999, according to First Call.
"With strong fourth-quarter performance in our Real Estate and Travel segments and improved results within the former CUC business units, we remain confident in the company's continued EPS growth," Cendant chairman, president, and chief executive Henry R. Silverman said in a statement.
Cendant also will announce that it is considering alternatives to the potential sale of a portion of its interactive businesses, and that it has started its previously announced stock repurchase program of up to $1 billion.
In late November, Cendant said it would sell its consumer software division, Cendant Software, and its subsidiaries, to Paris-based Havas for approximately $1 billion, as part of the company's ongoing strategy to increase shareholder value by focusing on Cendant's core businesses.
"In keeping with our strategy of selling noncore assets and using the proceeds to reduce debt and repurchase Cendant stock, we will continue to pursue additional asset sales in 1999," said Silverman.
To date, the company has repurchased approximately $100 million of Cendant common stock.
The company today is meeting with its institutional investors and sell-side analysts in New York.
Cendant is a provider of consumer and business services in travel, real estate, and marketing. The company runs car rental agency Avis and franchises Ramada Inn hotels.
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.
Shares of Cendant edged lower today in early trading, falling 2.47 percent to 19.75. The stock has traded as high as 41.69 and as low as 6.5 during the past 52 weeks.