The First American Corp. this week reported its second-quarter net income fell 17.7 percent from a year ago, despite record revenues.
First American said it earned $114.7 million, or $1.16 per share, in the second quarter, down from $139.5 million, or $1.43 per share, in the same quarter last year.
The company attributed its shrinking profits to an increase in the loss provision rate for the title insurance operations, a $22 million charge for certain title insurance regulatory/litigation matters, costs of investing in new businesses, and a drop in mortgage originations.
“Second-quarter revenues were $2.17 billion, an increase of 9 percent over the same quarter of 2005, setting an all-time company high for second quarter revenues,” said Parker S. Kennedy, chairman and chief executive officer of The First American Corp, in a statement. “Year-to-date revenues of $4.17 billion increased 13 percent over the same period last year and also set an all-time company high for first-half-of-the-year revenues. This growth in revenues was achieved despite a drop in mortgage originations.”
The company’s stock was trading at $37.85 a share at mid-morning today.