Realogy Holdings closes 2013 with strong earnings
Company profits boosted from adding franchises, closing acquisitions
Realogy Holdings (RLGY), a provider of real estate services based in Madison, N.J., recorded net revenue for the full year 2013 increase 13%, to $5.3 billion, compared to 2012, and a basic earnings per share of $3.01 for the full year.
Net income for the full year reached $438 million, which includes an income tax benefit of $242 million that was primarily due to a $341 million release of the domestic deferred tax valuation allowance offset by approximately $100 million for current year book tax expense.
In addition, Realogy free cash flow totaled $421 million for the full year, or $2.89 per share.
"Realogy posted strong revenue gains in 2013," said Richard Smith, Realogy's chairman, CEO and president. "This past year, we continued to position the company for growth by adding franchisees to our brands and closing and successfully integrating accretive acquisitions, while closely managing operating expenses and reducing our debt by approximately $460 million since Dec. 31, 2012."
For 2013, combined full-year homesale transaction volume — transaction sides times average sale price — increased by 18%, compared to 2012, while subsidiaries Realogy Franchise Group and NRT reported closed homesale transaction gains of 10% and 9%, respectively, in 2013.
Meanwhile, average homesale price improved 9% at RFG and 6% at NRT compared to the prior year.
Looking at the first quarter of 2014, Anthony Hull, Realogy's executive vice president, chief financial officer and treasurer, said, “We expect to see our homesale transaction volume increase by 8% to 12%,"
"Based on closed activity in January and month-to-date in February, along with January and February open contracts, we expect homesale sides to be down 3% to 5% year-over-year for RFG and NRT combined this quarter due primarily to inventory constraints and the impact of weather in certain markets, and average sale price to be up 13% to 15% on a combined basis,” Hull added.