The First American Corp. today said its first-quarter profit for 2005 fell because of the costs of investing in new businesses, despite “unusually steep” revenue.
First American said it earned $69.7 million, or 71 cents per share, compared with $79.2 million, or 83 cents per share, in the year-ago period. The company’s CEO said he was “especially pleased” with the growth in revenue “despite a lower level of mortgage origination activity.”
The nation’s largest data provider, including mortgage and title insurance services, today said it had revenue of $2 billion in the first quarter of 2005, up from $1.7 billion in the 2005 period.
“Though strong, earnings did not keep pace with the revenue growth for the quarter. Factors affecting results included an increase in the loss provision rate for the title insurance operations and continued investments in new business initiatives,” said Parker S. Kennedy, chairman and chief executive officer of The First American Corporation, in a statement.
In April, First American Title Insurance Co. announced the completed acquisition of privately held TransContinental Title Co., a provider of title and settlement services to national mortgage lenders.
“In early April of 2006, we acquired TransContinental Title Company, which will complement our National Lenders Advantage Operation and increase First American’s overall presence in the lending market,” Kennedy said.
“Combined, these divisions will drive revenue growth by offering mortgage originators two highly effective channels for complete title and settlement services. We also formed a new division, the First American International Services Group, comprised of offshore resources dedicated to providing a wide selection of high-quality, cost-effective offshore services to the mortgage industry,” Kennedy said.
The company’s stock was trading at $40.85 a share at mid-morning today, up $1.80.