Fidelity National Financial 3Q profits down 10.7%
Fidelity National Financial (FNF) reported a third-quarter profit of $74.3 million, or 33 cents a share, down 10.7% from one year ago. Last year's third-quarter income was $83.2 million, or 36 cents a share. The company fell just short of the average analyst estimates of 34 cents a share. Total revenue was $1.24 billion for 3Q, down from $1.37 billion from the year-ago period. Cash flow from operations stood at $66.1 million, up from $21.2 million a year ago. The title group had revenue of $1.19 billion, down from $1.32 billion a year ago but pre-tax earnings for the period were $138.1 million, down from $139.5 million in 3Q 2010. "We produced another strong quarter in our title insurance business, despite the continued difficult operating environment," said Chairman William P. Foley II. "Our industry-leading pre-tax title margin was 11.6%, including $7.2 million in realized investment losses, and 12.2% before the impact of those realized losses.” Foley said the strength in Fidelity’s commercial title business partially offset the ongoing weakness in the residential resale markets and that the company exceeded its targets in shared services cost reductions. "Our personal lines business suffered a pre-tax loss of $14 million due to claims relating to significant summer storms, most notably Hurricane Irene, versus a $1 million pre-tax loss in the prior year,” Foley said. “The personal lines business was a $9 million, or $0.04 per share, drag on our net earnings for the quarter.” In July, Fidelity announced the sale of its flood insurance business for $210 million, which will generate an estimated $154 million pre-tax gain. It is awaiting final regulatory approvals and expects to close that sale in the next several weeks. The flood business is shown as a discontinued operation in its financial statements. In August, Fidelity issued $300 million of seven-year, 4.25% convertible senior notes, allowing it to repay its maturing senior notes. The company used $75 million of the proceeds to repurchase approximately 4.6 million shares of common stock. Write to Justin T. Hilley.