Fidelity National Financial this week announced plans to restructure along with an earnings report detailing a first-quarter-profit drop of 76 percent from a year ago, when it recorded a large gain from selling a stake in an affiliate.
Jacksonville, Fla.-based Fidelity said this morning that its board of directors approved a plan that will restructure its relationship with its Fidelity National Information and Fidelity National Trust units. Essentially, the plan combines three public companies into two.
The plan will eliminate Fidelity’s holding company structure and result in what will become a new FNF, and the existing Fidelity National Information Services will become independent public companies, Fidelity said.
Fidelity National Financial’s stock was trading at $43.10 mid-morning, up $8.11 a share.
In its earnings report Wednesday, Fidelity National Financial said its first-quarter profit fell 76 percent from the first quarter of 2005. Excluding a large gain last year from selling a stake to an affiliate, net income fell 16 percent.
Net income for Fidelity National fell to $106.4 million, or 59 cents per share, from $444.5 million, or $2.51, a year earlier. Revenue totaled $2.36 billion.
“This quarter was a good start to another important year in the evolution of FNF,” said Chief Executive Officer William P. Foley II, in a statement. “We successfully closed the merger of FIS and Certegy on February 1st and the FIS results that we reported include two months of the combined entity.”
Year-earlier results included a $318.2 million gain from the sale of a minority stake in mortgage processor Fidelity National Information Services.
Apart from this item, year-earlier net income totaled $126.3 million, or 71 cents per share.