Realogy turns 4Q profit, but sees declining sales ahead

Realogy’s revenue increased 3.2 percent to $1.246 billion in the fourth quarter of 2013 compared to the same quarter a year before, but slipped 19.7 percent from the previous quarter as sales brokered by the company declined, the real estate giant reported.

An income tax benefit of $267 million was primarily responsible for driving the firm’s net income up to $320 million in the fourth quarter from $109 million the previous quarter and a net loss of $292 million the same quarter in 2012.

For all of 2013, Realogy posted an annual profit of $438 million as revenue increased 13 percent to $5.3 billion.

The company doesn’t expect year-over-year growth to continue through the first quarter of 2014. Realogy predicted that transaction sides in its brokerage operations would drop 3 to 5 percent year over year this quarter, based on closed activity in January and month to date in February, along with January and February open contracts. A transaction side is tallied each time an agent represents a buyer or seller in a home sale.

Anthony E. Hull, Realogy’s executive vice president, chief financial officer and treasurer, said that Realogy believes that home sales are sliding “due primarily to inventory constraints and the impact of weather in certain markets.”

In its brokerage operations, transaction sides reported by Realogy Franchise Group (RFG), the company’s franchise segment, increased 1.7 percent year over year  in the fourth quarter of 2013 but fell 18.9 percent compared to the previous quarter. Meanwhile, transactions sides reported by NRT, operator of Realogy’s company-owned brokerage offices, increased 0.9 percent on annual basis but dropped 22 percent compared to the previous quarter.

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Source: Realogy


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