Santa Ana-based First American Corp. swung to a third-quarter profit
From the Orange County Business Journal – Santa Ana-based title insurer and business data provider First American Corp. said on Thursday it swung to a third-quarter profit, thanks to a surge in mortgage refinancing and continued cost cutting.
The company posted a profit of $55.4 million, compared with a loss of $8.3 million a year earlier. Third-quarter earnings were slightly above analyst estimates.
Revenue was $1.56 billion, up 3.1% from a year ago and about 9% higher than analysts’ expectations.
The company’s core title insurance and services division posted $997 million of revenue in the quarter, a 2% increase from a year earlier.
The number of title orders closed was up 12% from the third quarter of 2008, thanks in large part to increased refinancing that’s occurring because of low interest rates.
The company said salary and other personnel expenses dropped 11% year-over-year because of job cuts, while other operating expenses were down 9%, due to a consolidation of title offices and other cost-cutting moves.
The company still is working toward finalizing the long-planned split of its title operations from its smaller information solutions group.
Assuming regulatory approvals are timely, First American is aiming for the spinoff to be completed by April, according to Chief Executive Parker Kennedy.
As part of the preparations for the spinoff, First American said it has executed a letter of intent with Experian Group Ltd. that would facilitate the purchase of Experian’s interest in a joint venture the two companies have for subsidiary First American Real Estate Solutions LLC.
The venture is 80% owned by First American and 20% owned by Experian. First American plans to buy out part of Experian’s indirect interest in the company for $48 million.
Upon an additional share exchange and conversion, Experian said on Thursday it would hold approximately 2% of the total issued share capital of First American once the transaction is completed.
By MARK MUELLER
Orange County Business Journal Staff
