Realogy Holdings Corp. (RLGY) reported a first quarter loss of $0.22 per share, still $0.02 better than analyst expectations of a $0.24 loss as revenues rose 5.5% year over year to $1.1 billion.
The boost in revenue was driven by higher home sale transaction volume.
The net loss for first quarter 2015 was $32 million.
Realogy's franchise, RFG, and company-owned business, NRT, segments achieved a 10% increase in combined home sale transaction volume (transaction sides multiplied by average sale price) compared to first quarter 2014. RFG and NRT reported home sale transactions increases of 4% and 6% and average home sale price increases of 6% and 3%, respectively.
"With 10% home sale volume growth, the first quarter was stronger than the 5% to 9% range we anticipated," said Richard Smith, Realogy's chairman, CEO and president. "The increases we saw in home sale transaction sides and average sale price in March, along with the strength of the sales contracts opened in March and April, are indicating a healthy spring selling season for the existing home sale market.
“Operationally, the first quarter momentum has carried over into the second quarter with NRT's acquisition of Coldwell Banker United, Realtors. We expect it to be an immediately accretive acquisition that geographically strengthens NRT's presence in Florida and Texas, expands into new markets in the Carolinas and now connects its Eastern Seaboard presence contiguously from Maine to Florida," Smith said.
The company expects even further home sale gains in the company quarter.
"Looking ahead at the second quarter of 2015, we expect to see home sale transaction volume gains in the range of 8% to 11% year-over-year on a company-wide basis," said Anthony Hull, executive vice president, chief financial officer and treasurer. "Based on our closed and open sales activity in March and April, we expect second quarter home sale transaction sides to be up 5% to 7% year-over-year and average sale price to increase 3% to 4% for RFG and NRT combined.
"Traditionally, the first quarter is our weakest due to the seasonality of residential real estate and represents our lowest share of the year for transaction volume, revenue and EBITDA. We also have historically reported a net loss in the first quarter as the period EBITDA is not sufficient to offset interest expense, depreciation and amortization which are reflected on a straight-line basis throughout the year,” Hull said. “As the spring selling season unfolds, we expect our aggregate number of home sale transaction sides to increase sequentially from approximately 272,000 in the first quarter of 2015 to between 400,000 and 408,000 in the second quarter."
The company ended the quarter with a cash and cash equivalents balance of $184 million and no outstanding borrowings under its revolving credit facility.
Total long-term corporate debt, including the short-term portion, net of cash and cash equivalents totaled $3.7 billion at March 31, 2015.