Stewart Information Services Corporation
) fourth-quarter 2013 earnings came in at 30 cents per share,
surpassing the Zacks Consensus estimate by a nickel. Results,
however, declined 32% year over year.
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Behind the Headlines
Fourth-quarter operating revenues of Stewart Information Services
totaled $445.1 million, decreasing 13.7% year over year while
total revenue declined 13.6% to $450.2 million. The operating
revenue figure however missed the Zacks Consensus Estimate of
$484 million. The decline was largely attributable to lower title
insurance revenues (down 10.6%) as well as lower mortgage service
revenues (down 46.5%). A decrease in revenues from direct
operations (down 7.3%) and agency operations (down 13%) led to
reduced title insurance
Mortgage service revenues suffered due to weak demand for
services related to distressed properties, as housing market
continued to witness improvement.
Employee costs decreased 2.9% year over year. As a
percentage of total operating revenues, employee costs increased
350 basis points to 31.6% in the reported quarter.
Pretax earnings of Stewart Information Services dropped nearly
42% year over year to $15.5 million attributable to soft
performance at the Mortgage services segment.
Number of title orders opened in 2013 were 0.392 million, down
from 0.430 million in 2012. Number of title orders closed were
0.296 million, comparing unfavorably with 0.316 million in 2012.
For full-year 2013, Stewart Information Services posted earnings
of $2.73 per share which declined 41% year over year.
The top line came in at $1.93 billion, improving 1.4% year over
Stewart Information Services exited 2013 with cash worth $194.3
million, down 6.7% from 2012-end.
Notes payable were $5.8 million at the end of 2013, down 10.1%
Cash provided by operations was $87.2 million in 2013, down 27.7%
year over year.
Cost Savings Update
Stewart Information Services expects pre-tax savings of $25
million annually by 2015 on the back of its ongoing streamlining
Share Repurchase Update
Stewart Information Services intends to pay back its shareholders
about $70 million through share buybacks. Following the review of
its capital plans, it envisions share repurchases in the second
half of 2014 with the majority scheduled in 2015.
Stewart Information Services presently carries a Zacks Rank #5
Results of Other Insurers
AmTrust Financial Services Inc
) reported operating earnings per share of $1.03 for the fourth
quarter of 2013. The results outpaced the Zacks Consensus
Estimate of 80 cents and the year-ago figure of 70 cents.
Navigators Group Inc
) reported fourth-quarter 2013 operating earnings of $1.13 per
share, outpacing the Zacks Consensus Estimate of 88 cents. The
results also surged from 59 cents per share earned in the
American Financial Group Inc
) reported fourth-quarter operating earnings per share of $1.28,
which comfortably beat the Zacks Consensus Estimate of $1.23. On
a year-over-year basis, earnings surged 91%.