Lender Processing Services, Inc. (LPS) said Thursday that earnings fell 24.6 percent during the third quarter, as strength in the company's default businesses largely offset growing weakness in mortgage origination products and services at the Jacksonville, Fla.-based firm. LPS earned $51.3 million during the third quarter, compared to $68 million in earnings in the year-ago period; earnings were adjusted for the effect of the company's recent spin-off from financial services transaction management provider Fidelity National Information Services (FIS). Adjusted net earnings for third quarter 2008 were $57.8 million, or $.61/share, compared to an adjusted $59.7 million, or $.61/share, one year earlier, the company said. Consolidated revenues rose 11.1 percent to $472.7 million, primarily on the back of astounding growth in the company's default outsourcing business line. The company is the mortgage market's largest outsourcing provider of products and services targeting the management of foreclosures and borrower defaults, and has seen demand in this area soar as lenders and servicers grapple with a historic surge in bad loans. The company operates two segments, a data and analytics division and a loan transaction services division (which includes the company’s default management operations). Operating revenue from the company's default businesses totaled an astounding $241.8 million during the third quarter -- up 97.1 percent over year ago numbers, and nearly 23 percent above the $197.2 million in revenue booked just one quarter earlier. The company said that expanded demand from existing customers, as well as expanded market share in the default space, led to the large gain. As a result of strength in default services and in the company's LPS Desktop application, revenue declines seen elsewhere in the firm's business have mattered little. During the first nine months of 2008, revenue growth in every other area of LPS' business has been negative -- but revenue growth in default services, up more than 85 percent this year alone, helped push consolidated revenues to a 17.8 percent gain between January and August. LPS has received some press as of late, becoming a favorite "recession pick" of CNBC Mad Money host Jim Cramer in recent weeks. Analysts at Keefe Bruyette also upgraded the company's stock from "market perform" to "outperform" earlier this week. Shares were at $22.00, down 8.1 percent, when this story was published. Write to Diana Golobay at diana.golobay@housingwire.com. Editing by Paul Jackson. Disclosure: The author held no positions in any of the stocks mentioned when this story was published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.