LPS Profit Rises on 50% Gain in Default Services
Mortgage and real estate software developer Lender Processing Services (LPS) earned $75.2m ($0.78 per share) in Q209. The results mark an increase of more than 35% from Q208's earnings as demand for LPS' default services continues to grow. The continued influx of delinquencies and foreclosure proceedings among mortgage servicers that rely on LPS' software platforms helped push the company’s default services revenue up 51.9% to $299.5m. Revenue from LPS’ loan transaction services, its biggest department, increased 42.1% to $448m from Q208. Higher settlement services and increased appraisal volumes pushed loan facilitation services revenue up 25.8% to $148.5m. Higher activity-based fees boosted LPS' mortgage processing revenue, which increased 9.1% to $89.6m from Q208. Overall, revenue from LPS’ technology, data and analytics sector was up 37.9% from Q209, thanks in large part to the firm’s acquisition of the Fidelty National Real Estate Solutions (FNRES), which completed in Q109. Without FNRES, which was rebranded to LPS Real Estate Group, the sector saw a 20.8% increase in revenue from Q208, again due to higher activity-based fees. LPS anticipates Q309 and year-end results to show continued improvement. “We expect third quarter adjusted earnings to be in the range of $0.72-$0.78 per diluted share,” Jeff Carbiener, LPS president and CEO said in the company’s quarterly report. “For full year 2009, we now expect revenues to grow 20%-22% compared to 2008 and adjusted earnings to be in the $2.91-$3.01 per diluted share range.” Write to Austin Kilgore.