PHH Corp. reports 12% increase in earnings

February 21, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

PHH Corp. of Hunt Valley said its third-quarter earnings rose 12 percent, as its mortgage-lending and auto-leasing businesses grew strongly enough to offset a decline in the firm's real estate services business.

PHH said it earned $19.5 million during the three months that ended Jan. 31, or $1.10 a share. Revenue was $586.7 million, up 19 percent. For the nine months, revenues are up 15 percent to $1.8 billion and per-share profits up 11 percent to $3.27.

While the third-quarter performance was better than the 98 cents a share PHH earned in the comparable period of fiscal 1995, it was marginally below the mean analyst estimate of $1.12 a share.

"I think within 2 cents is probably the closest assessments come," said Roy A. Meierhenry, PHH chief financial officer. "If we were short anyplace it was probably in our relocation business. We're satisfied, considering the fact that corporate earnings in total aren't that robust."

PHH's biggest gains came in its mortgage business, in which operating profit rose 48 percent to $9.3 million. The company said it got more business from affinity groups such as unions and universities through which it markets the loans, and its relationships with financial institutions. Mortgage closings were up 200 percent.

"Of our growth, about 50 percent came from lower interest rates and 50 percent from market share gains," Mr. Meierhenry said.

PHH's corporate auto fleet management business boosted its operating profit 22 percent to $15.2 million, led by expansion in Britain and in its contract truck maintenance operations.

Its real estate services business, which includes business-relocation consulting and asset management for banks that have repossessed distressed properties, saw its operating income fall 10 percent to $8.6 million.

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