Cendant reports record 2004 results

Cendant Corporation reported on Tuesday record results for fourth quarter and full year 2004.

Fourth quarter profits from continuing operations increased 18%, while full year 2004 revenue increased 10% to $19.8 billion and net income was $2.1 billion.

The fourth quarter results reflected strong performance in the company’s real estate and travel units, including record fourth quarter revenues in its employee relocation, car rental, fuel card, GDS and online travel businesses.

Cendant’s president and chief financial officer, Ronald Nelson, stated: “The last twelve months have been a watershed year for Cendant, during which we began the process of positioning the Company for accelerated, long-term growth in our core travel and real estate businesses… we are re-investing in our travel and real estate businesses. With the recent acquisition of Orbitz and pending acquisitions of ebookers and Gullivers Travel Associates, we will have secured a leading worldwide position in the fast-growing online travel industry, while substantially enhancing our merchant strategy with access to significant amounts of hotel inventory.

Cendant’s Travel Distribution Services, consisting of a GDS product for the travel industry, corporate and consumer online travel services, and travel agency services, increased revenues in 2004 by 15% to $451 million. The division includes Galileo and Wizcom.

While profits decreased due to the cost related to acquisition of Orbitz, Inc. in November 2004 for approximately $1 billion and integration of its online travel businesses, the acquisition places Cendant in a leading position in the US domestic online travel distribution business and is expected to help push profits in 2005.

In addition, revenue and profits were both positively impacted by their acquisitions of Flairview Travel in second quarter 2004 and Travel 2/ Travel 4 in fourth quarter 2003.

Apart from these acquisitions, revenue and profits benefited from a 34% increase in our global on-line travel bookings. 

2005 will see further on-line travel bookings with Cendant’s acquisition of privately held, UK-based Gullivers Travel Associates, including its Octopus Travel Group Ltd. subsidiary, for approximately $1.1 billion, expected to closed in April 2005. Gullivers is a leading wholesaler of hotel stays, destination services, travel packages and group tours, primarily serving the Asian and European markets, and OctopusTravel.com is a global online provider of lodging and destination services, selling directly to consumers as well as through third-party affiliates and low cost airlines. And from the agreed acquisition of UK-based ebookers for approximately $330 million. Ebookers is a leading pan-European online travel agency with websites serving 13 European countries.

Cendant’s Hospitality Services unit, including franchised lodging brands, timeshare exchange, timeshare sales and development, and vacation rental businesses revenues for 2004 grew from $612m to $711, a 16% increase.  Profits grew 4%.

Revenue from RCI and lodging franchise each increased 13% and revenue from the Timeshare Resort Group increased 8%, primarily reflecting higher revenue per transaction.

Cendant’s hotel franchises include Ramada, Howard Johnson, Days Inn, Super 8, Travelodge, Knights Inn, and Wingate Inn.

Reported by Charles Kao