LPS Posts $74.9m of Net Earnings in Q409
Mortgage technology and performance data provider Lender Processing Services (LPS) posted $74.9m - or $0.77 per share - of net earnings in Q409 amid continued strong demand for its default servicing solutions. Adjusted net earnings, accounting for a purchase price amortization of $0.05 per share, were $79.6m in the quarter, compared with $60.9m in the year-ago quarter. "LPS had a strong fourth quarter despite challenging market conditions and a fragile macro-economic environment," said LPS executive chairman Lee Kennedy, in the earnings statement Monday. LPS recently determined mortgage delinquency reached a new record of 10% in December, surpassing November's 9.97%. Along with rising delinquencies, demand for LPS default services grew in Q409 - boosting the company's revenue in that unit 14.3% over the same quarter last year to $278.6m. "Our Loan Facilitation business posted record growth as it benefitted from a better year-over-year origination market while our Default Services business continued to deliver very strong results," said LPS president and CEO Jeff Carbiener. "Also, our Mortgage Processing and other technology businesses had another outstanding quarter." LPS experienced $189.4m of revenue in the technology, data and analytics division. Mortgage processing revenue rose 17.9% from the year-ago quarter to $104.2m, primarily because of the addition of a JP Morgan Chase (JPM) portfolio into the LPS mortgage servicing platform. Revenue in the loan transaction services segment grew by 28.7% from the previous year to $421.6m. Loan facilitation services revenue of $142.9m was up a whopping 70.3% from the year-ago quarter, due to higher settlement services and increased appraisal volumes, LPS said. "Building on the strong 2009 results, we expect first quarter 2010 adjusted earnings to be in the range of 78-80 cents per diluted share," Carbiener said. "For full year 2010, we expect revenues to grow 8%-10% compared to 2009 and adjusted earnings to be in the $3.49-$3.56 per diluted share range." Write to Diana Golobay. Disclosure: The author holds no relevant investment positions.