Real estate holding corporation Realogy posted revenues of $1.1 billion in the first quarter of 2019, a decline of 9 percent from the previous quarter due largely to lower transaction volume at its own-side real estate brokerage NRT.
The company posted an adjusted net loss per share of $0.67 – compared to the previous quarter’s adjusted net loss per share of $0.38 – which fell in line with an estimate by financial analysis firm Zacks.
“In the first quarter of 2019, Realogy moved aggressively to deliver new marketing, technology and data products for our affiliated agents, roll out new pricing models and realize new efficiencies across the business,” Realogy CEO and President Ryan Schneider said in a statement. “Despite continued market headwinds and an increasingly competitive environment, we remain intensely focused on executing our strategy and improving our value proposition to drive greater success for our affiliated agents, our franchisees and, ultimately, our shareholders.”
The first quarter of the year is seasonally the company’s smallest quarter, Schneider said on an earnings call for the company’s fourth-quarter results earlier this year. In the first quarter of 2018, the company posted revenue of $1.2 billion.
The biggest driver for the decline in revenue in the first quarter of 2019 was a decline in transactions at NRT, according to the release. Across both NRT and Realogy Franchise Group, transaction volume was down 9 percent compared to the first quarter of 2018.
NRT specifically saw a $101 million decline in revenue to $816 million, year-over-year.
Nationally, transaction volume fell 4 percent over the same period for the industry, according to data from the National Association of Realtors.
Realogy pulled in $799 million in gross commission income in the first quarter of 2019, down from last year’s $902 million.
The company’s lower-than-expected fourth quarter revenue at the end of 2018 was also due in part to declining transaction volume at NRT, which was recently dethroned by HomeServices of America as the top brokerage by transaction volume in the country.
At the same time, Realogy is focused on cutting costs. Commission and agent-related costs fell to $575 million in the first quarter of 2019, from $645 million at this time last year. Overall operating expenses fell to $1.24 billion from $1.31 billion over the same time period.
“We realized meaningful cost savings and operational realignment across the company during the first quarter,” Charlotte Simonelli, Realogy’ executive vice president, chief financial officer and treasurer, said in a statement. “We remain on track to achieve $70 million in cost savings in the full year 2019 and are actively pursuing additional opportunities across the business.”
Realogy’s stock entered a downward swing in the wake of its fourth-quarter results, dropping from more than $18 per share to historic company lows of less than $12 per share. It will open the day today at $13.11 per share, and it remains to be seen how Wall Street will react to the earnings report.