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Non-Tech : Cendant Corporation (NYSE:CD) -- Ignore unavailable to you. Want to Upgrade?

To: Wren who wrote (1564)	8/13/1998 8:22:00 PM
From: Roger B Finlen	Read Replies (2) \| Respond to of 3627

Here's a arlicle for all CD'ers to read Hopefully positive spin begins !! Time to reconsider? Cendant restates earnings results By Stephanie O'Brien, CBS MarketWatch Last Update: 5:56 PM ET Aug 13, 1998 Also see NewsWatch NEW YORK (CBS.MW) -- Cendant Corp. formally restated its earnings for 1995-97 Thursday to reflect accounting irregularities at its CUC International unit, but said the problems won't affect its 1998 results. The move set the stage for investors to revisit the hard-hit franchiser whose stock plunged earlier this spring when the problems were first disclosed. Breaking News Stocks slide on overseas weakness DuPont sinks on 3rd-quarter forecast Premier Parks spirals lower St. Jude strikes gold, maybe; few care Strike hides strong consumer buying More top stories... CBS MarketWatch Columns Updated: 8/13/98 5:44:12 PM ET Cendant revised its 1997 profit from operations to 70 cents a share, from the $1 a share it had previously reported. The figure includes a reduction in earnings of 28 cents a share, equivalent to $392 million pretax, plus 2 cents a share for discontinued operations, the company said. Results for 1995 and 1996 were also revised lower. "With accounting and management governance issues largely behind it, the pendulum will swing back to looking at the numbers,'' said James Pettit, an analyst at Hambrecht & Quist, who has a "hold" rating on the stock. Shares of Parsippany, NJ-based Cendant (CD) rose 3/8 to 16 1/2. The stock hit a 52-week high of 41 11/16 on April 6. Franchise giant Cendant, a huge franchise and marketing company whose brands include Coldwell Banker real estate, Avis rental cars and Ramada hotels, was created last December by the merger of CUC and HFS Inc. In April, however, the company uncovered accounting irregularities at CUC. The stock, which had turned plenty of heads on Wall Street, started turning lots of stomachs instead. By some accounts, CUC may have faked as much as $500 million in revenue from 1995 to 1997 forcing today's restatement. Cendant now faces the major task of restoring confidence in its management and future prospects. Some investors and analysts still believe Cendant can generate earnings growth of as much as 25 percent a year. In addition to its restatements, the company reported second-quarter earnings rose 52 percent to $201.9 million, or 23 cents a share, from $132.4 million, or 16 cents in the same period last year. Seven of 12 analysts who follow the stock have a "hold" rating on it, according to Zacks Investment Research. Cautious view But at least one large investor isn't sure Cendant's worst days are behind it. "By no means is this company out of the woods," said Patricia Macht, a spokeswoman for the California Public Employees Retirement System (CalPERS), which owns about 4.5 million Cendant shares and estimates its pension fund has lost about $89 million as a result of the accounting debacle. CalPERS, along with the New York State Retirement Fund and the New York City pension funds are suing Cendant for fiduciary misdeeds. Still, Macht said, there is reason to be optimistic. "We still believe that there's the ability to turn this company back around." Cendant lowered its 1996 earnings by 18 cents a share and its 1995 earnings by 14 cents a share.