Fidelity National Financial Inc. (FNF) said Tuesday lower title and escrow premiums pushed second-quarter profits down 30 percent, to $132.6 million, compared to the same quarter last year. Earnings fell to 73 cents per share, compared with $1.07 in the second quarter of 2005.
The company’s revenue for the quarter was up 9 percent over the same quarter last year, to $2.65 billion, thanks to growth at Fidelity National Information Services (FIS), an information technology company that sells software used to process nearly 50 percent of U.S. home mortgages.
While second-quarter revenue at FIS was up 44 percent to $1.02 billion, Fidelity National Financial’s title insurance subsidiary, Fidelity National Title Group Inc. (FNT), was headed in the other direction.
Fidelity National Title reported second-quarter revenue of $1.57 billion, a 7.2 percent decline from the same quarter in 2005. Year-over-year profits for the quarter were down 27.5 percent, at $116.5 million. Earnings for the quarter were 67 cents per share, down from 93 cents a year ago.
Direct orders opened in the title and escrow business totaled 697,200 for the quarter, down from 829,500 last year. The fee per file was up slightly to $1,597, a 6.5 percent increase from the second quarter of 2005.
Fidelity National Title “is producing solid returns and significant cash flow in a slower mortgage market,” said Fidelity National Financial’s chief executive officer, William P. Foley II.
Fidelity National Financial is in the process of a restructuring plan that involves a merger with Fidelity National Information Services. After the merger, Fidelity National Title will assume the name and ticker symbol of its former parent, Fidelity National Financial.
Fidelity National Financial will transfer most of its assets and liabilities to Fidelity National Title Group, in exchange for the title insurance group’s Class A stock,