First American Financial's profit declines in 3Q
First American Financial Corp. (FAF) saw its profit decline to $33.1 million in the third quarter ended Sept. 30, down from $38.8 million in the year-ago period as it faces a challenging real estate and mortgage market. The provider of title insurance and settlement services for real estate transactions made 31 cents per share, down from 37 cents a share a year ago. Revenue for the quarter was $1 billion, down 9 percent from the third quarter of 2009. The current quarter results include net realized investment losses of $400,000, while the third quarter of 2009 benefited from net realized investment gains of $4.9 million, the company said. First American said its title insurance and services segment had a pretax margin of 6.5% and its specialty insurance segment had a pretax margin of 16.5%. Commercial title revenue of $72.9 million was up 39% compared to the year-ago period. "Even though we expect that the real estate and mortgage markets will remain challenging in 2011, we believe the company is well positioned to meet these challenges and to capitalize on opportunities that may develop,” said Dennis J. Gilmore, CEO. "Title orders, driven primarily by refinance transactions, increased throughout the third quarter, reaching the highest levels of the year in September, with open orders of approximately 6,600 per day and closed orders of approximately 4,500 per day,” he said. "It remains to be seen how long the current refinance wave will last; however, as we move through the final quarter of 2010, we are well positioned with a commercial pipeline that continues to build and a strong inventory of refinance orders." For the first nine months of the year, First American earned $80.7 million, up from $72.3 million for the first nine months of 2009. Revenue year-to-date stands at $2.88 billion, down from $3.01 billion a year ago. Write to Kerry Curry. The author holds no relevant investments.