Lender Processing Services, Inc. ( LPS ) reported first
quarter 2013 net income of $53.9 million or 63 cents per share
versus $47.1 million or 56 cents per share in the year-ago quarter.
The year-over-year increase in earnings was primarily attributable
to the successful execution of its strategy of delivering advanced
technology-driven solutions in accordance with the evolving
requirements of the mortgage industry.FISERV INC (FISV): Free Stock Analysis ReportGREEN DOT CP-A (GDOT): Free Stock Analysis
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Excluding the non-recurring items, adjusted earnings for the
reported quarter were $55.5 million or 65 cents per share versus
$49.5 million or 59 cents per share in the year-earlier quarter.
The quarterly adjusted earnings were in line with the Zacks
Total revenue decreased 2.9% year over year to $471.7 million,
primarily driven by lower Default Services revenue owing to reduced
industry foreclosure volume, partially offset by higher revenue
from Technology, Data, and Analytics (TD&A) and Origination
Services. The quarterly revenues marginally exceeded the Zacks
Consensus Estimate of $471 million. Operating income increased 6.7%
year over year to $99.4 million, buoyed by higher contributions
from TD&A and Origination Services.
Revenues for the TD&A segment stood at $193.6
million in the reported quarter, up 10.4% year over year, driven by
higher revenues across all sub-segments. While revenue from
Servicing Technology sub-segment climbed 6.8%, due to growth in
loan portfolio, Origination Technology rose 17.7% on higher
industry origination volume. Default Technology sub-segment revenue
was up 16.0% due to higher professional services revenue and market
share gains, partially offset by lower foreclosure referral
volumes. Revenue from Data and Analytics increased 15.5% primarily
due to contract wins.
Revenues for the Transaction segment fell 11.0%
from the prior-year quarter to $278.0 million. The downside in
revenues was primarily due to 31.4% drop in Default Services
revenue from low industry foreclosure activities, partially offset
by 12.0% increase from Origination Services. Overall operating
income for the segment stood at $50.5 million versus $52.3 million
in the year-ago quarter.
At quarter-end, Lender Processing had adequate liquidity with cash
and cash equivalents of $88.4 million and $398 million available
under its credit facility. Long-term debt (excluding current
portion) was $1054.7 million.
Net cash used in operating activities aggregated $97.5 million in
the reported quarter, compared to net cash provided by operating
activities of $90.1 million in the year-ago quarter. The
year-over-year decrease was primarily due to settlement fees for
legacy legal and regulatory matters. Adjusted free cash flow for
first quarter 2013 was $49.5 million compared to $68.7 million in
the prior-year quarter, largely due to changes in working
For the second quarter of 2013, management expects adjusted
earnings per share in the range of 63 cents-67 cents and revenues
of $460 million-$480 million.
Lender Processing is well positioned to enhance the mortgage value
chain and deliver innovative technology, data and expertise to its
clients. Going forward, the rapidly growing mortgage landscape
continues to create new requirements for its clients. Also, the
recent conclusions of many of the company's legal matters allow it
to focus more on growth and innovation to create new opportunities
for the company.
Lender Processing currently has a Zacks Rank #4 (Sell). Other
players in the industry include formidable names such as
Fiserv, Inc. ( FISV ), Green
Dot Corporation ( GDOT ) and
Jack Henry & Associates Inc. ( JKHY ), all carrying a
Zacks Rank #2 (Buy).