LandAmerica Financial Group Inc. reported fourth quarter profits fell 42.6 percent, to $34.3 million, because of a slowdown in home sales and costs related to its acquisition of Capital Title Group Inc.
At $1.95, earnings per share still beat analysts’ expectations of $1.76, Reuters reported. Net income for the year was $98.8 million or $5.61 per share, down from $165.6 million or $9.29 per share in 2005.
LandAmerica Chairman and Chief Executive Officer Theodore L. Chandler, Jr. said the Sept. 8 acquisition of Scottsdale, Ariz.-based Capital Title increased the company’s national market share to 19.5 percent in the third quarter 2006, and strengthened its presence in western states. LandAmerica estimated its market share in the third quarter of 2005 at 18.2 percent.
“We remain confident in our ability to realize synergies from Capital Title, which are now expected to generate annual cost savings of approximately $16 million beginning in 2007,” Chandler said.
Operating revenue from agency title operations was $494.8 million in fourth quarter 2006 compared to $583.5 million in fourth quarter 2005, reflecting the downturn in the residential real estate market across most regions.
Claims provisions as a percentage of operating revenue for the title operations segment was 5.4 percent in fourth quarter 2006 compared to 4.8 percent in fourth quarter 2005, and 6.1 percent for the full year 2006 compared to 5.2 percent for the full year 2005. The increase in the claims provision ratio for the full year 2006 was largely attributable to claims increases in the 2003 and 2004 policy years, the company said.
Fourth quarter operating revenue for the lender services segment increased by $13.2 million, or 21.2 percent, compared to the same quarter 2005.
LandAmerica Financial Group and its subsidiaries provide real estate transaction services throughout the United States, Mexico, Canada, the Caribbean, Latin America, Europe, and Asia through a network of more than 1,000 offices and 10,000 agents.
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