First-quarter profits at title insurer Fidelity National Financial Inc. were down 15.6 percent from the same quarter last year, to $83.4 million, or 37 cents per share, the company said.
That compares with $98.8 million, or 45 cents per share, in the first quarter of 2006, after adjusting last year’s results to exclude the results of former subsidiary Fidelity National Information Services Inc., which was spun off into an independent company.
Fidelity National Financial’s main business, title insurance and escrow, generated $1.25 billion in revenue during the first quarter, down from $1.39 billion last year. Fidelity National Title Group’s pretax earnings totaled $114.8 million, down 13.4 percent from the same quarter last year.
Direct orders closed during the first quarter fell 10.5 percent to 390,400 compared to last year, and the closing percentage also slipped from 64 percent to 60 percent.
Fidelity National Financial’s title insurance underwriters — Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title — issue about 29 percent of all title insurance policies in the United States, the company said.
In addition to title insurance, Fidelity National Financial offers three lines of specialty insurance — flood, home warranty and personal lines insurance. Specialty insurance generated $99 million in revenue, compared with $110.4 million in the first quarter of 2006, and pretax earnings of $25.4 million, down 21.8 percent from $32.5 million last year.
Fidelity National Financial Chairman and Chief Executive Officer William Foley II said the first quarter is normally the most difficult in the title business, and emphasized the company’s profit margin.
“Even with this seasonal lull, we were able to generate a 9.2 percent pretax (profit) margin in the title business by remaining focused on employee counts and efficiency metrics,” Foley said. “This was nearly equal to the title pretax margin in the first quarter of 2006, despite a 10.5 percent decline in title segment revenue from the prior year.”