) reported first quarter adjusted earnings of 45 cents per share,
surpassing the Zacks Consensus Estimate of 37 cents. Results also
exceeded the year-ago quarter's earnings by 40.6%.
The solid performance came on the back of increase in revenue and
profit margins. Lower share count due to share repurchases buoyed
the bottom line.
CoreLogic reported net income of 35 cents per share, up 29.6%
from 27 cents earned in the year-ago quarter.
Quarterly Operational Update
Operating revenues increased 10.9% year over year to $397.2
million in the first quarter driven by solid contribution from
Mortgage Origination Services segment and Data & Analytics
segment revenue. It surpassed the Zacks Consensus Estimate of
Total operating expenses in the quarter increased 9.3% year over
year to $341.9 million. The increase was driven by higher cost of
services (up 9.3% year over year), selling, general and
administrative expenses (up 6.2% year over year) and depreciation
and amortization (up 18% year over year).
The magnitude of increase in revenues more than offset the
magnitude of increase in expenses, thus driving up operating
income 22.2% year over year to $55.3 million.
Adjusted earnings before interest tax, depreciation and
amortization (EBITDA) increased 15.9% year over year to $116.2
Quarterly Segment Update
Data & Analytics
revenues in the segment increased 9.5% year over year to $161.1
million, primarily due to higher demand for property-related
information and analytics as well as advisory services related to
assisting clients with regulatory compliance
Adjusted EBITDA of $45.7 million were up 6.9% year over year.
Mortgage Origination Services
revenues in the segment increased 24.5% year over year to $176.5
million, due to increased market demand for credit report, tax
services and flood certifications, and market-share gains by the
tax services business.
Adjusted EBITDA of $72.5 million were up 34.1% year over year.
Asset Management & Processing Services
revenues in the segment decreased 10.9% year over year to $66.8
million, due to a double-digit fall in market volumes of
delinquent loans and foreclosure starts, and the impact of exit
of unprofitable product lines over the past twelve months.
Adjusted EBITDA of $7.7 million were down 31.4% year over year.
Cost Reduction Programs
Cost reductions related to CoreLogic's previously announced
Project 30 program were approximately $4.8 million in the
In 2012, CoreLogic launched the Technology Transformation
Initiative (TTI), an expansion and extension of Project 30, a
cost saving program related to workforce reductions in corporate
shared services and information technology (IT), outsourcing of
certain IT and business process functions and cuts in spending on
real estate and outside services. TTI was launched to provide a
new platform to CoreLogic's existing technology infrastructure.
This is expected to augment the functionality and performance of
CoreLogic and reduce application management and development
costs. Expenses related to TTI were $7.4 million in the first
quarter of 2013.
In the reported quarter, CoreLogic repurchased 2.9 million common
shares for a total of $75.7 million and raised its 2013 share
repurchase target to 5 million from 3 million.
CoreLogic exited the quarter with cash and cash equivalents of
$125.6 million, down 15.6% from $148.9 million at Dec 31, 2012.
Net cash flow from operating activities increased 42.3% year over
year to $92.5 million.
Free cash flow in the first quarter was $65.4 million.
Long-term debt of CoreLogic declined 0.5% from $792.5 million at
year end 2012 to $788.2.4 million at Mar 31, 2013. Debt to
capital ratio deteriorated 90 basis points to 41% from 40.1% at
year end 2012.
As of Mar 31, 2013, CoreLogic had approximately $500.0 million
available in its revolving credit facility.
On Mar 20, 2013, CoreLogic purchased Case-Shiller from
) for a purchase consideration of $6 million to enhance its
residential property insights platform. Case-Shiller, a home
price index is a leading expert in home price trends and property
The acquisition is estimated to be accretive to 2013 earnings.
Performance of Another Consultant
) reported net earnings of 56 cents per share for the first
quarter of 2013, representing a 1.8% year over year decline.
However, results exceeded the Zacks Consensus Estimate by 27.3%.
CoreLogic currently carries a Zacks Rank #3 (Hold). Among others,
Information Services Group Inc.
) with a favorable Zacks Rank #1 (Strong Buy) is scheduled to
report its first quarter 2013 results on May 13.
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