Fidelity National Financial saw third-quarter profits fall by 40 percent to $127.6 million, despite laying off 650 workers in its title division and revenue growth in its information services division.
The slowdown in the housing market drove the drop in earnings, from $2.99 per share in the third quarter of 2005 to $2.02 in the latest quarter, said Chairman and Chief Executive Officer William P. Foley II.
At the company’s Fidelity National Title subsidiary, quarterly earnings fell 39 percent year-over-year, from $169.7 million in the third quarter of 2005 to $103.4 million in the latest quarter. But earnings at Fidelity National Information Services were up 36 percent, to $78.6 million.
“The third quarter was one of transition for our title insurance business,” Foley said. “The mix of business clearly shifted from a majority of purchase transactions toward more refinance transactions, which generate about half of the revenue of a purchase transaction.”
Fidelity National Title responded by cutting 650 jobs in the third quarter, which cut expenses by $75 million, Foley said in a press release.
Fidelity National Financial is in the process of a restructuring plan that includes 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.
The company said it now expects the merger to close on Nov. 9.