Industry News

LandAmerica Financial Group, Inc. (NYSE: LFG), a provider of real estate transaction services, reported operating results for the first quarter ended March 31, 2004. 

First Quarter 2004  
Operating Revenue $759.9 Million 
Net income $20.9 Million 
Net income per diluted share $1.11 

First Quarter 2003
Operating Revenue $696.4 Million
Net income $42.0 Million
Net income per diluted share $2.28

Financial Highlights

• Revenues for the first quarter of 2004 were $759.9 million. Direct title revenues showed a decline resulting from reduced levels of residential refinancing activity, while agency revenue improved as the agents continued to report business written in 2003.
• The Lender Services segment reported $40.2 million of operating revenue compared to $.9 million in the first quarter of 2003, reflecting the acquisitions of Info1 Holding Company, Inc. (“Info1”), which offers credit reporting services, and LERETA Corp. (“LERETA”), a tax and flood certification company, in the second half of 2003. The 2004 figure is after net revenue deferrals of $1.2 million.
• Earnings for the first quarter of 2004 declined by almost 50% from the first quarter of 2003.  Earnings were impacted by a number of factors, including but not limited to the effect on direct operations of significantly reduced refinancing volumes in the early part of the first quarter of 2004, a shift in mix toward more agency business, a slightly higher expense structure in title operations, a slightly higher claims provision, increased interest and amortization expenses and exit and termination costs.
• Earnings from the Lender Services segment for the first quarter of 2004 were $3.8 million, including amortization of $3.3 million and net revenue deferrals of $1.2 million, compared to a loss of $.5 million in the first quarter of 2003.

“The results of the quarter reflected the impact of a turbulent environment for refinance demand, on top of the typical seasonal slow-down in residential buy-sell activity, countered somewhat by the expected pattern of revenues reported through agency channels and the improved results of recent acquisitions,” commented Charles H. Foster, Jr., Chairman and Chief Executive Officer. “The decline in refinancing activity in the latter half of 2003 resulted in the sharpest decline in order counts we have seen in the past five years. Along with our fourth quarter earnings release, we announced plans to reduce our cost structure by at least $70 million on an annualized basis. To date, we have implemented reductions to achieve over half of the targeted savings and our efforts continue. Even though order counts increased significantly in March, we have not altered our plans or our focus on the importance of optimizing our cost structure.

“We were particularly pleased with the contribution from our Lender Services segment which consists primarily of our tax and flood services acquisition (LERETA) and our credit reporting services acquisition.

“We also continued to build LandAmerica for the future.  Our efforts included two credit reporting companies, which became part of Info1, and County Title Holding Corporation, the parent company of Southland Title Corporation, Southland Title of Orange County, Southland Title of San Diego and Southland Title Equities, which significantly expanded our presence in the very important California market.”

Source: LandAmerica Financial Group, Inc