The slowdown in the housing market sent third-quarter profits at LandAmerica Financial Group down 64 percent compared to last year, the company reported.
LandAmerica’s third-quarter earnings totaled $15.2 million, or $.89 per share, down from $42.4 million, or $2.35 per share, during the same period last year.
But the company has experience weathering such downturns in the business cycle and increasing its national market share even as it cuts costs during the downturn, said President and Chief Executive Officer Theodore L. Chandler Jr.
“The softening of the real estate market combined with a claims reserve adjustment has negatively impacted the results for the quarter,” Chandler said. “Our leadership team is experienced at managing through the cycle and is actively and aggressively adjusting our costs to the softening market conditions.”
LandAmerica says its share of the real estate transaction services market stood at 18.5 percent in the second quarter, up from 17.9 percent last year (data on market share lags a quarter behind financial results).
Last month the company completed its $252 million acquisition of Capital Title Group, which the company expects will boost 2007 earnings by 2 percent to 3 percent. The purchase of the Scottsdale, Ariz.-based title insurance underwriting, agent and settlement services provider gives LandAmerica a greater presence in lender services in key western states, the company said.
Most of LandAmerica’s third-quarter operating revenue of $954 million came from title operations ($865 million), followed by lender services ($59.6 million) and corporate services ($29.2 million).
In title operations, claims provisions as a percentage of operating revenue increased to 8 percent, up from 5.3 percent in the same quarter last year. “Absent any further unanticipated increases in claims payments on prior policy years, we expect that our claims provision ratio for 2006 will be more in line with recent claims provision ratios,” the company said.
LandAmerica reported operating revenue in the lender services segment was down 5 percent from $62.9 million in third-quarter 2005, primarily because of declines in the real estate market that affected the title and closing and credit services businesses, the company said.