LPS earnings drop almost 23% in first quarter
Lender Processing Services' (LPS) first-quarter income fell 22.9%, as difficult conditions in the origination and default markets perpetuated an arduous business environment. The Jacksonville, Fla.-based company earned $55.9 million, or 63 cents a share, down from $72.5 million, or 75 cents a share, a year earlier. Revenue decreased about 6% to more than $556 million for the three months ended March 31, compared to $592.4 million in the year-ago period. Revenue is also down almost 13% from $638.8 million in the fourth quarter. Despite the drop in quarterly earnings, President and Chief Executive Jeff Carbiener remained positive about this year's prospects. "We are off to a solid start in 2011, and while market conditions in some of our businesses and the broader economy remain challenging, LPS with its strong market presence remains in a good position to grow earnings in 2011," Carbiener said. "Building on the first quarter results, we expect second-quarter adjusted earnings to be in the range of 79 to 82 cents a share. For full year 2011, given current market conditions, we now expect revenues to decline in the mid-single digit range compared to 2010, however, we expect adjusted earnings to increase 2% to 4% to $3.57 to $3.64 a share." LPS derived about $358.4 million in revenue from loan transaction services. The firm recently signed a consent order with regulators to establish new foreclosure processes following a federal investigation. Michigan Attorney General Bill Schuette said this week he would look into questionable mortgage documentation, particularly those associated with DocX, a subsidiary of LPS. Interest income was nearly cut in half between the first quarter of 2010 and the first quarter of 2011, LPS reported. Interest income hit $330,000, down from $623,000 the year-ago period. As of March 31, LPS had total assets of $2.2 billion. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR. Disclosure: The author holds no relevant investments.