Fidelity National Financial 2Q profit sinks 42.6%
Fidelity National Financial (FNF) reported a second-quarter profit of $80, or 36 cents a share, down 42.6% from the year-ago period in the absence of a large one-time gain a year ago. Last year's second-quarter income of $139.6 million, or 61 cents, included approximately a $63 million after-tax gain, or 27 cents per share, from the sale of Sedgwick CMS in May 2010. Still, the company beat analysts' estimates of 31 cents a share. Total revenue was $1.32 billion for 2Q, down from $1.5 billion in the year-ago quarter. Cash flow from operations stood at $30.2 million, down from $136 million a year ago. The title group had revenue of $1.2 billion, down from $1.28 billion a year ago but pre-tax earnings for the period were $140.6 million, up from $124 million in 2Q 2010. "Despite a continued sluggish real estate environment, we were able to generate an impressive 11.7% pre-tax margin in our title business, a 200 basis-point increase over the prior year and a sequential increase of 240 basis points from the first quarter of this year," said Fidelity National Chairman William Foley II. "While refinance orders represented 51% of closed order volumes this quarter versus 46% in the prior year, we still produced a 5% increase in the fee per file," he said, adding that much of that is attributable to the strength of Fidelity's commercial business. Fidelity National generated nearly $94 million in commercial revenue in the second quarter, a 38% increase over the prior year. The commercial business produced a fee per file increase of 26% over both the prior year quarter and the first quarter of this year. The title insurance firm also said the impact of cost-reduction initiatives contributed to its pre-tax title margin. Fidelity recently announced the sale of its flood insurance business for approximately $210 million. Capital from that sale will be redeployed into other areas if the company, Foley said. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.