First American Financial (FAF) sold 45% of its ownership in mortgage data and analytics firm Corelogic (CLGX) earlier this week, Mark Seaton, First American senior vice president, said Thursday.
The move is part of First American’s plan to spin CoreLogic off into a fully independent and publicly traded company, which was formally completed in June 2010.
The Santa Ana, Calif.-based company sold 4 million of its 8.9 million in shares of CoreLogic, resulting in proceeds of $90.3 million and a realized gains of $15.2 million, which the company will recognize in the third quarter. Seaton said First American will liquidate its remaining 4.9 million in shares over the next three years.
The company, which provides title insurance and settlement services to the mortgage industry, reported net income more than double in the second quarter to $73 million, or 68 cents a share, beating analyst estimates of 44 cents, according to Zack’s Investment Research. In the year-ago period, it reported $32.3 million, or 30 cents a share.
Total revenues for the quarter of 2012 totaled $1.1 billion, an increase of 18% relative to the second quarter of 2011.
First American’s second-quarter title insurance and services segment pretax margin of 11.7% was the highest since 2005.
“Second-quarter open orders were up 36% year-over-year, primarily driven by strong refinance activity,” said First American Chief Executive Dennis Gilmore. “We also saw an increased in the resale and commercial transactions in the quarter. Given first-half results and a string order pipeline, we are on track to deliver on our goal of an 8% to 10% title margin for the full year 2012.”
CoreLogic took earnings and revenue to record levels in the second quarter, reporting net income of $42.6 million in the quarter, with more than $1.3 million in gains and sales on discontinued operations. The profits increased from $31.4 million one year ago when the company lost more than $8.5 million from discontinued businesses.
