The Hunt Valley-based management services company reported lower earnings yesterday for both the second quarter and six months that ended Oct. 31.
Robert D. Kunisch, chairman and chief executive, attributed the decline in profits to a "sluggishness in real estate markets on a worldwide basis" and a drop in vehicle purchases in the United States.
PHH earns a fee from the sale of homes when a client transfers a worker from one location to another. "Corporations are not moving as many people at this time and we are feeling the effects of that decline in business," explained company spokesman, Peter Brinch.
Mr. Kunisch said in a prepared statement that the company's mortgage banking unit "continues to produce solid growth with its servicing portfolio now exceeding $4 billion."
Commenting on the vehicle management operations of PHH, Mr. Kunisch said the number of units under management worldwide continues to increase over prior year levels. "In Europe," he said, "we are experiencing solid growth in vehicle management, and all our fuel and maintenance card services are expanding and generating good returns."
Such is not the case in the United States. He said that operating profits of domestic vehicle-management services operations "are down due to a decline in vehicle purchases and expenditures to strengthen our service delivery capabilities."
Looking ahead, he said that as a result of uncertainty in the global and political arenas, the company expects client activity to remain close to current levels for the remainder of the current fiscal year.