Fidelity National Spin-Off Posts Q2 Earnings Gain
Let's be honest: there aren't many publicly-traded mortgage firms seeing their earnings increase right now. Lender Processing Services, Inc. (LPS), recently spun off from Fidelity National Information Services (FIS) into its own stand-alone company, is one of them. The company said Tuesday afternoon that profits rose 5 percent during the second quarter, as the mortgage services giant reaped the benefits of a booming market for its mortgage default management services. The company reported Q2 net earnings of $63.5 million, compared to $60.5 million in the prior year quarter; revenue rose 8.3 percent to $460.4 million for the quarter. "Second quarter results were very strong despite difficult market conditions and overall weakness in the economy," said William P. Foley, company chairman. Jeff Carbiener, president and CEO at LPS, noted that "strong results" in the company's default management division more than offset a decline in the company's origination-centric operations. The company operates two segments, a data and analytics division and a loan transaction services division (which includes the company's default management operations). LPS said that while revenue in its data and analytics arm remained essentially flat for the year, loan transaction services saw operating income surge nearly 23 percent to $75.8 million on the strength of the company's default services operating unit. In fact, the company's default services segment saw revenues surge nearly 90 percent compared to year-ago levels, reaching $197.2 million, with LPS citing "strong market growth and our ability to continue to gain market share." "We're off to a strong start as an independent public company and while the broader economic environment and the real estate market in particular, remain challenging, LPS with its unique mix of businesses is well-positioned for the future," said Carbiener. With a default segment that has thus far delivered the goods from a revenue perspective, it's pretty hard to argue his point. For more information, visit http://www.lpsvcs.com. Disclosure: The author held no positions in LPS or FIS when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.