Cendant: Katrina puts crunch on '05 revenue, income

NEW YORK -- Cendant said its travel and real estate businesses lost $20 to $30 million in revenue because of Hurricane Katrina, and the company reduced its 2005 earnings per share forecast by $0.20.

In addition to the lost revenue, the hurricane also clipped $15 to $40 million in 2005 pretax income because of asset impairment losses, primarily related to timeshare properties and rental cars, Cendant said.

The lost revenue and damages to timeshares and rental cars, amounting to a $35 to $70 million hit to pretax income in 2005, was Cendants preliminary estimates of the damages.

The impact of the entire loss, which will be recorded in 2005, however, will be offset by insurance, with Cendant estimating that it will recover some $10 to $35 million. Some of that insurance money, though, will only show up in 2006 results, the company said.

Cendant revised its full-year 2005 projections for earnings per share, pegging it at $1.11 to $1.18.

To contact the reporter who wrote this article, send e-mail to Dennis Schaal at [email protected].

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