Charges at Cendant Hurt 3Q EarningsCendant Corp., Parsippany, NJ, last week reported revenue increases for the third quarter, but those gains were wiped out by charges taken for the investigation of accounting irregularities and a severance package for departed chairman Walter Forbes.
Revenue grew 23 percent to $1.46 billion, yet earnings per share dropped 39 percent to 14 cents because of 10 cents in charges. Net income also fell 40 percent to $123.1 million. Adjusted for the charges, EPS rose 20 percent over the same period a year ago to 24 cents.
The alliance marketing division, which generates most of Cendant's direct marketing business, reported revenue growth of 14 percent -- the slowest of its three business divisions -- but saw earnings before taxes, depreciation and amortization fall 60 percent.
As part of a restructuring intended to improve the division's operating performance, senior management changes have been announced. Cendant chief financial officer Michael Monaco has been named chairman/CEO of alliance while alliance CFO Michael Wargotz becomes CEO of the lifestyle unit and alliance chief operating officer John Chidsey becomes CEO of the insurance/wholesale unit.