RISMEDIA, August 12, 2010—Realogy Corporation, a global leader in real estate and relocation services, reported results for the second quarter ended June 30, 2010. Realogy’s net revenue for the second quarter of $1.3 billion increased 23% compared to the same period in 2009. For the latest quarter, Realogy recorded net income attributable to the company of $222 million. EBITDA before restructuring and other items for the quarter was $234 million, an improvement of $85 million year-over-year due to revenue gains, cost reductions and productivity increases. EBITDA for the quarter was $544 million, which included the benefit of $314 million related to the reduction in former parent legacy liabilities.
Realogy’s core business drivers showed improvement during the second quarter. The number of home sale transactions increased 11% year-over-year at the Realogy Franchise Group (RFG) and 16% at NRT, the company-owned brokerage unit. The average home sale price increased in the second quarter by 5% at RFG and 12% at NRT compared to the second quarter of 2009. Cartus experienced a 40% increase in relocation initiations primarily due to increased volume from corporate clients including incremental business from the Primacy Relocation operations it acquired earlier this year. Title Resource Group had a decrease in its refinance title and closing units, which was partially offset by increases in purchase title and closing units and average price per closing unit.
“Clearly, Realogy had a strong second quarter, and we are pleased with our operating and financial results for the period,” said Richard A. Smith, Realogy’s chief executive officer. “Looking forward, however, it is shaping up to be a difficult third quarter because of the expiration of the Home Buyer Tax Credit and an uncertain near-term outlook for the economy. The sales volume of open contracts for both our company-owned and franchise segments—which are the leading indicator for closed and reported sales in the third quarter—dropped sharply, down an average of 17% in June and July on a year-over-year basis. High affordability and near-record low mortgage rates alone cannot offset the impact of high unemployment and declining consumer confidence.”
As a result of lower than forecasted industry sales levels in the second quarter and weakening third quarter prospects, the full-year industry outlook for 2010 is now relatively flat to 2009. In July and August, respectively, both Fannie Mae and the National Association of Realtors downwardly revised their forecasts for the full year. Currently, Fannie Mae and NAR are forecasting 2010 home sales to be flat to 2009 at 5.1 million units.
“While we are faced with a challenging housing market in the second half of 2010, Realogy will continue focusing on what we can control,” added Smith. “This strategy includes executing on strategic growth opportunities while maintaining our focus on costs.”
For more information, visit www.realogy.com.
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