Despite a 10 percent annual increase in revenue, real estate franchise and brokerage giant Realogy Holdings Corp. says it expects to lose up to $78 million during the first quarter, thanks largely to $89 million in interest expenses on the company’s debt.

In announcing preliminary results today, Realogy said its interest expenses for the first three months of the year will total about $89 million, down 48 percent from a year ago.

In a regulatory filing, Realogy said an October initial public offering of 46 million shares that raised $1.176 billion after expenses helped the company trim $2.9 billion in debt. The company finished 2012 with $5.9 billion in total liabilities, including long-term debt and deferred income taxes, down from $8.8 billion at the end of 2011.

Revenue for the quarter is expected to be in the range of $950 million to $960 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are projected at up to $74 million, which would represent a 40 percent increase from a year ago.

In addition to owning the nation’s largest provider of real estate brokerage services, NRT LLC, Realogy provides franchise services to brokerages affiliated with its Century 21, Coldwell Banker, ERA, Sotheby’s International Realty, and Better Homes and Gardens Real Estate brands.

Realogy attributed much of the improvement to an increase in sales volume — the number of transaction “sides” multiplied by average sale price — at both company-owned brokerages and affiliated franchisees.

“On a national level, pricing continues to react to low inventory levels as demand is exceeding available supply,” said Richard Smith, Realogy CEO, president and chairman, in a statement. ” As anticipated for the spring selling season, inventory levels are starting to modestly increase. Consistent with the views we expressed in the first quarter, we remain confident in the strength of the housing recovery.”

Based on open contracts in February and March, Realogy anticipates percentage increases in sales volumes in the low- to mid-teens during the second quarter, CFO Anthony Hull said in a statement.

Separately, Realogy announced plans for a secondary stock offering of 35 million shares by funds affiliated with Apollo Global Management LLC. The Apollo-affiliated funds would continue to hold up to 30.4 million shares of Realogy common stock, although underwriters of the deal will also have a 30-day option to purchase an additional 5.25 million shares from the funds.

In a regulatory filing, Realogy said the company had 145.4 million shares of common stock outstanding as of April 5. This month, Realogy intends to use remaining proceeds from the IPO, cash on hand, and borrowings under a revolving credit facility to redeem $330 million in outstanding notes.

At the end of 2012, Realogy said its real estate franchise systems had approximately 13,600 offices worldwide in 102 countries and territories, including approximately 6,100 brokerage offices in the U.S. and approximately 238,900 independent sales associates worldwide. That total includes 41,300 independent sales agents at company-owned brokerage offices.

“We believe that one of our strengths is the strong relationships that we have with our franchisees, as evidenced by our 97 percent retention rate through December 31, 2012,” Realogy said.

Franchisees pay Realogy fees for the right to operate under one of the company’s brands, and for dedicated national marketing and servicing programs, technology, agent recruiting, training and education.

Realogy said the fees provide “recurring franchise revenue streams at high operating margins.”

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