Stewart Information Services Corp. on Friday reported its 2006 earnings were down significantly from 2005 despite strong performance in the fourth quarter.
Net earnings for 2006 fell to $43.3 million, down 51 percent from $88.8 million in 2005. Earnings per share totaled $2.36 for the year, compared with $4.86 in 2005.
Revenues for 2006, however, set a record at $2.5 billion, the company reported, up 1.7 percent from 2005. Despite the growth, the increased revenue from acquisitions, new agencies, commercial transactions and international operations was “substantially offset by a decline in transaction volume handled by the company’s direct operations in certain major markets of the country” along with rising interest rates.
“Our growing commercial and international operations significantly contributed to our results in 2006 and we’re very proud of our accomplishments in these areas,” said Malcolm S. Morris, chairman and co-chief executive officer, in a statement. “Commercial revenues have more than tripled since the beginning of the decade when we began a major push in this area. Our international operations enjoyed strong increases in profits in 2006. Although our international business represents a small percentage of total title revenues today, the growth potential is exciting.”
The increase in revenues was mirrored in the fourth quarter of 2006 as revenues grew 2.6 percent from a year ago to $645.8 million, and net earnings gained to $10.7 million, with earnings per share climbing to 59 cents.
Stewart’s book value per share increased by 4.2 percent to $44 at Dec. 31, 2006, compared with $42.21 at Dec. 31, 2005.
The softening of the national housing market hurt title orders in the fourth quarter, the company said, as orders fell 13.4 percent from the same period a year ago.
“In the second quarter of 2007, we expect to deliver our next generation Web-enabled production system built on Microsoft’s net development platform and will begin the process of conversion and roll-out,” said Stewart Morris Jr., president and co-chief executive officer, in a statement. “As we convert to this full featured title and escrow system, we anticipate gains in productivity and enhanced customer service.”