FNF boosts 4Q profit 32% on sale of flood insurance business

Fidelity National Financial (FNF) earned $172.7 million, or 78 cents a share, in the fourth quarter, a 32% jump buoyed by gains from the sale of its flood insurance business.

The title insurance and mortgage services company posted earnings of $130.8 million, or 58 cents, in the year-earlier period. FNF beat the analyst consensus of 72 cents, according to Yahoo Finance.

Revenue fell to $1.27 billion in the fourth quarter from $1.53 billion in 2010, and cash flow from operations dipped to $49.6 million from $113.3 million.

Fidelity National’s title insurance division, the vast majority of its business, brought in revenue of $1.26 billion, down from $1.52 billion a year earlier. Total title claims paid dropped 14%, and CEO George Scanlon said the company expects the trend to continue.

The sale of its flood insurance for $210 million led to $95 million in after-tax gains, contributing 43 cents to diluted earnings a share in the fourth quarter.

The Jacksonville, Fla.-based company also inked a $119 million agreement to sell 85% of its personal  lines business, which includes auto, home and liability insurance, to WT Holdings. Fidelity National recorded a $9 million loss for the fourth quarter from the deal, which is expected to close in the first half of 2012.

Earnings for full-year 2011 dipped slightly to $369.5 million from $370.1 million in 2010.

“The fourth quarter was a strong finish to a great year in our title business, as our emphasis on profitability is reflected in these results,” Scanlon said in a release. “Overall, we are confident that our title business is well-positioned to produce strong, industry-leading returns in 2012.”

Scanlon said the company would likely benefit from an expected increase in refinance activity from HARP 2.0, but said effects likely wouldn’t surface until the second quarter 2012.

Fidelity National also closed on a deal Monday to acquire all outstanding common stock of restaurant chain O’Charley’s (CHUX), adding it to an existing eatery portfolio. Fidelity National holds a minority stake in American Blue Ribbon Holdings, owners of Bakers Square, Max & Erma’s and Village Inn. The transaction was not included in the fourth-quarter report.

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