LPS shrugs off market challenges and pulls a profit in 3Q 2010
Lender Processing Services (LPS) a mortgage and real estate technology and services provider, reported net earnings of $78.7 million or 85 cents per share, in the third quarter of 2010, up from $75.5 million or 78 cents per share, in last year's quarter. LPS reported total revenue of $626 million, compared to $619.4 million a year ago. "Third quarter and year-to-date 2010 results were strong and, while the broader economic environment remains difficult and some of our markets continue to present challenges, LPS, with its solid market presence, remains well positioned for a strong finish in 2010 and to continue to grow revenue and earnings in 2011," said LPS CEO Jeff Carbiener. "Based on year-to-date trends and the outlook for the fourth quarter for the origination and default markets, we expect fourth-quarter adjusted earnings to be in the range of 90-92 cents per diluted share," he adds. "For full year 2010, we expect revenue to grow 3 to 4% compared to 2009 and adjusted earnings to be in the $3.48-$3.50 per diluted share range." Adjusted net earnings for the third quarter of 2010 were $82.2 million, or 89 cents per share, compared to $80.2 million, or 83 cents per share in the third quarter of 2009 and, were higher primarily due to growth in operating income, reduced interest expense and a lower share count. Adjusted net earnings in the current quarter include an adjustment for purchase price amortization of 4 cents per diluted share and the prior year quarter included a similar adjustment of 5 cents per diluted share. LPS said it delivered a strong third quarter despite a very difficult environment in the origination market, sluggish conditions in the default market and an ongoing challenging business environment. Lee Kennedy, executive chairman of LPS, said in a statement he is expecting a stronger fourth quarter for the company. Operating income of $144.3 million in the quarter increased from $143.6 million in the third quarter of 2009. Year-to-date adjusted free cash flow (operating cash minus certain expenses and purchases) for 2010 was $207.6 million compared to $231.6 million for the first nine months of 2009 primarily due to higher capital expenditures as well as from changes in working capital. Write to Jacob Gaffney. The author holds no relevant investments.