Fidelity National Financial (FNF) - Get Fidelity National Financial, Inc. - FNF Group Report said Thursday that its third-quarter profit fell 40.5%, significantly below analysts' estimates.
The company, which provides outsourced insurance claims management services, earned $127.57 million, or 70 cents a share, in the quarter, compared with $214.4 million or $1.21 a share, a year ago. Analysts surveyed by Thomson First Call were expecting earnings of $164.93 million or 89 cents a share.
Third-quarter revenue rose 4.23% to $2.63 billion as against analysts' expectation of $2.67 billion.
By segment, third-quarter earnings for the company's services segment increased by 35.75% from a year ago to $78.6 million and for Fidelity National Title segment decreased by 39.07% from a year ago to $103.4 million.
"The third quarter was one of transition for our title insurance business. The mix of business clearly shifted from a majority of purchase transactions toward more refinance transactions, which generate about half of the revenue of a purchase transaction," the company said.
"In the title business, we were focused on reducing headcount and eliminated approximately 650 positions during the quarter, which helped in reducing title related personnel costs by $75 million versus the prior year quarter. FIS had a very strong quarter, as they generated 10.2% revenue growth and grew EBITDA by more than 10%. Organic revenue growth has accelerated significantly since the FIS/Certegy merger through the improvement of the sales organization, cross selling existing customers, developing new products and services that leverage the core processing capability and putting the best resources behind new large targeted customer opportunities."
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