Purchase orders give boost to Fidelity’s title segment in Q2

Foley: Company is delivering through changing environments

Big-four title company Fidelity National Financial released its second-quarter earnings this week, after Old Republic, First American, and Stewart Title announced their numbers in July.

Fidelity reported $3.9 billion in total revenue for the second quarter, up from $2.4 billion year over year. That’s also up more than 50% from the company’s first quarter 2021 total revenue, when Fidelity announced “only” $2 billion in total revenue.

Net earnings were reported at $546 million.

In title revenue, Fidelity announced an even $3 billion, up from $2.2 billion in the second quarter of 2020. Pre-tax earnings were $644 million, versus $528 million in the second quarter of 2020.

Fidelity’s total commercial revenue was $347 million, an 89% increase year-over-year driven by a 65% increase in closed orders. Total commercial orders opened also increased 58% year over year.

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Chairman William Foley said the company’s investments in technology, operations and automation have improved efficiency in the wake of the COVID-19 pandemic.

“We are building a company that has a financial model designed to deliver earnings and cash flow through changing market environments,” Foley said.

The company also announced a pre-tax title margin of 21.5%, and an adjusted pre-tax title margin of 22.7% against 2020’s pre-tax title margin of 23.7% and adjusted pre-tax title margin of 18.4%.

Second quarter refinance orders opened and closed both decreased this quarter — 25% and 5%, respectively, on a daily basis. However, purchase orders opened increased 41% on a daily basis, and purchase orders closed increased 57% on a daily basis versus the second quarter of 2020.

Foley said the company recently announced a third quarter dividend of $0.40 per share — an increase of 11% from Fidelity’s previous quarterly dividend.

“We have continued to make share repurchases throughout the second quarter, executing against our $500 million share repurchase plan,” Foley said. “During the quarter we purchased 4 million shares at an average purchase price of $43.36 per share.”

First American reported $2.3 billion in total revenue for the second quarter, a 41% increase year over year and up from $2 billion in the first quarter of 2021. Rival Stewart Title reported $802 million in total revenue for the second quarter, and Old Republic reported $2.25 billion.

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