Fidelity National Financial, Inc.
) reported third-quarter 2013 adjusted earnings of 50 cents per
share, surpassing the Zacks Consensus Estimate by a penny.
However, earnings reduced 23% from the year-ago quarter.
Including a charge of 7 cents per share stemming from charge
associated with one-time costs of debt extinguishment at Ceridian
and write-off of a deferred tax asset and expenses related to a
definitive agreement to acquire
Lender Processing Services, Inc.
), net income of Fidelity National came in at 43 cents per share,
significantly down 58.6% year over year.
Revenues of Fidelity National grossed $2.2 billion, surpassing
the Zacks Consensus Estimate by 7.2% and also increasing 6.9%
year over year. The improvement was fueled by higher title
premiums, increase in Restaurant as well as Remy revenues.
Total expenses escalated 15.8% year over year to $2 billion,
attributable to increase in personnel costs, higher cost of
Restaurant revenues, cost of Remy revenues, increase in agent
commissions and higher interest expenses.
Purchase orders opened and closed in the reported quarter
increased 10% and 15% year over year, respectively.
Fidelity National Title Group
Revenues were $1.5 billion, up 6% year over year.
Operating pre-tax earnings increased 4.3% from the year-ago
quarter to $218 million. However, adjusted pre-tax title margin
narrowed 20 basis points (bps) year over year to 14.2%.
Direct Orders Opened declined nearly 32.9% from the comparable
prior-year period to 474,000. Direct Orders Closed declined 14.6%
year over year to 410,000.
Commercial title revenues rose 25% year over year to $120
million, attributable to 22% improvement in commercial fee per
file and 3% rise in closed orders.
Operating revenues improved 12.7% year over year to $336 million.
Adjusted Earnings before Interest, Tax, Depreciation and
Amortization (EBITDA) were $14 million in the quarter, surging
40% year over year.
Adjusted EBITDA margin expanded 80 bps to 4.2%.
Operating revenues totaled $266 million in the third quarter,
surging 86% year over year.
Adjusted EBITDA jumped 61.9% from the year-ago quarter to $34
million while adjusted EBITDA margin deteriorated 200 bps
Fidelity National exited the quarter with cash and investment
portfolio of $5.25 billion, up from $5.18 billion at 2012-end.
Notes payable of Fidelity National remained almost flat with the
2012-end level of $1.3 billion.
Cash flow from operations declined 29.3% year over year to $130
On Oct 23, the board of directors of Fidelity National approved a
new quarterly cash dividend of 18 cents per share which will be
paid on Dec 30 to the shareholders of record as on Dec 16, 2013.
The new quarterly dividend reflects 12.5% increase from the
previously paid quarterly dividend of 16 cents per share.
On May 28, Fidelity National inked a definitive agreement to
acquire Lender Processing for $2.9 biilion. Fidelity was to pay
50% of the purchase consideration in cash and the remaining 50%
in shares of FNF common stock.
In June, Fidelity National adjusted the consideration mix,
increasing the cash component by nearly $500 and reducing the
stock component by an equal amount.
Recently, on Oct 25, Fidelity National further adjusted the
consideration mix, increasing the cash component by nearly $511
million and thereby decreasing the stock component by an equal
amount. As a result, the company will now pay 82% of the
consideration in cash and the remaining 18% will be paid in the
form of Fidelity National's common stock. However, the
consideration is subject to further adjustments.
Performance of Other Title Insurers
OneBeacon Insurance Group Ltd.
) reported its third-quarter 2013 operating net income of 29
cents per share, significantly beating the Zacks Consensus
Estimate of 22 cents. The results also surged 52.6% year over
Old Republic International Corp.
) reported its third-quarter 2013 operating net income of 35
cents per share, substantially surpassing both the Zacks
Consensus Estimate as well as the year-ago quarter results.
Fidelity Financial currently holds a Zacks Rank #2 (Buy).
FIDELITY NAT FI (FNF): Free Stock Analysis
LENDER PROC SVC (LPS): Free Stock Analysis
ONEBEACON INSUR (OB): Free Stock Analysis
OLD REP INTL (ORI): Free Stock Analysis
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