LPS earnings drop 73% in 2Q
Lender Processing Services (LPS) earned $21.4 million, or 25 cents per share, in the second quarter, a 73% drop from the $80.4 million reported one year earlier. The technology and financial services provider reported revenue of $72.2 million for the quarter, less than half of the $148.4 million last year. LPS recorded a $7.9 million charge from personnel reductions and a $31.8 million charge for writing down certain investments, including $26.6 million for discontinued operations. Corporate expenses, which include legal and compliance costs, nearly doubled to $33.9 million in the second quarter from $18 million last year. In April, LPS signed a consent order with the Federal Reserve to settle a federal investigation into foreclosure practices at the firm and major mortgage servicers. LPS was required to boost oversight of its processes. It also faces a separate investigation from Michigan Attorney General into alleged documentation problems related to the robo-signing scandal that surfaced last year. The company's CEO resigned in July due to health concerns. Lee Kennedy, the executive chairman of the board at LPS, is serving as the interim chief. "Our default services and loan facilitation businesses continued to be impacted by lower industry volumes, however, our mortgage processing business had a good quarter while our Other TD&A businesses posted strong growth from continued market share gains," Kennedy said. "While difficult market conditions persist in some of our businesses and the broader economy remains very sluggish, LPS with its strong market presence remains well-positioned." LPS also plans to restructure its senior, secured credit lines. The financing includes a $400 million revolving credit facility, a $350 million, five-year term loan and a $550 million seven-year term loan. LPS plans to use proceeds from the loans to refinance existing debt and other general corporate purposes. The company expects the close the funding in August, "subject to market and other customary conditions." Write to Jon Prior. Follow him on Twitter @JonAPrior.