Fidelity National Financial, Inc.
) reported adjusted earnings of 68 cents per share, surpassing
the Zacks Consensus Estimate of 61 cents by 11.5%. Earnings
were 28.3% higher than 53 cents earned in the year-ago quarter.
Including a charge of 7 cents related to an employment litigation
lawsuit and expenses related to a definitive agreement to acquire
Lender Processing Services, Inc
), net income of Fidelity National came in at 61 cents, down 6.1%
year over year.
Revenues of Fidelity National grossed $2.3 billion, up nearly 32%
year over year. The year-over-year improvement was fueled by
higher title premiums, increase in Restaurant as well as Remy
revenues. Results lagged the Zacks Consensus Estimate by a
Total expenses escalated 36.3% year over year to $2.1 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 a respective of 11% and 13% year over year.
Fidelity National Title Group
Revenues were $1.6 billion, up 15.9% year over year.
Operating pre-tax earnings increased 31.8% year over year to $265
million. Adjusted pre-tax title margin expanded 200 basis points
year over year to 16.5%. The quarter marked the best second
quarter pre-tax title margin since 2003.
Direct Orders Opened increased 0.7% year over year to 672,000.
Direct Orders Closed increased nearly 10% year over year to
Commercial title revenues increased 9% year over year to $112
million, attributable to 15% improvement in the commercial fee
per file, partially offset by a 6% decrease in closed orders.
Revenues improved 7.1% year over year to $347 million.
Adjusted Earnings before Interest, Tax, Depreciation and
Amortization (EBITDA) were $23 million in the quarter, up from
$12 million in the year-ago quarter.
Adjusted EBITDA margin expanded 200 basis points to 6.7%.
Revenues totaled $568 million in the reported quarter. Adjusted
EBITDA was $65 million, while adjusted EBITDA margin was 11.4%.
Fidelity National exited the quarter with cash and investment
portfolio of $5.3 billion, up from $5.2 billion at 2012 end.
Notes payable remained almost flat with 2012-end level of $1.3
Book value per share increased 1.9% as on Dec 31, 2012 to $21.18
as on Jun 30, 2013.
Cash flow from operations increased 6.3% year over year to $253
million in the reported quarter.
On May 28, Fidelity National inked a deal to acquire Lender
Processing Services Inc. for $2.9 billion or $33.25 per share.
The acquisition is expected to culminate in the fourth quarter of
2013, subject to regulatory approval.
The acquisition will strengthen the mortgage services business of
the company. Fidelity National expects the acquisition to
generate cost synergies of more than $100 million as well as be
accretive to future earnings. Moreover, addition of Lender
Processing Services to its portfolio will ensure a diversified as
well as a recurring revenue base for Fidelity National.
Performance of other title insurers
First American Financial Corporation
) reported second-quarter 2013 earnings of 77 cents, surpassing
the Zacks Consensus Estimate of 65 cents and the year-ago
earnings of 21 cents.
Stewart Information Services Corporation
) reported second-quarter 2013 earnings of $1.09 per share,
surpassing the Zacks Consensus Estimate of 63 cents and the
year-ago earnings of $1.05.
Fidelity National carries a Zacks Rank #3 (Hold).
FIRST AMER FINL (FAF): Free Stock Analysis
FIDELITY NAT FI (FNF): Free Stock Analysis
LENDER PROC SVC (LPS): Free Stock Analysis
STEWART INFO SV (STC): Free Stock Analysis
To read this article on Zacks.com click here.