The First American Corporation Reports Record-Breaking Operating Results For the Third Quarter 2002
October 23, 2002
SANTA ANA, Calif., Oct. 23 /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF - News), a leading diversified provider of business information and related products and services, announced today operating results for the third quarter ended Sept. 30, 2002.
Net income for the third quarter of 2002 was a company record of $67.4 million, or 84 cents per diluted share, which includes a pretax investment loss of $2.6 million resulting from the previously announced sale of the company's subsidiary, First American Fastrac Systems, Inc. This item totaled $1.5 million on an after-tax basis, or 2 cents per diluted share. Excluding this item, operating net income for the third quarter was $68.9 million, or 86 cents per diluted share, which compares with operating net income of $45.5 million, or 60 cents per diluted share, for the same quarter of 2001. The prior-year quarter excludes previously announced one-time charges (net of investment gains) totaling $3.8 million on an after-tax basis, or 5 cents per diluted share. Operating revenues for the third quarter of 2002 were a record breaking $1.18 billion, an increase of 24 percent when compared with operating revenues of $952.8 million for the same period last year.
Net income for the nine-month period of 2002, exclusive of one-time items, was $161.2 million, or $2.03 per diluted share. This compares with net income of $120.5 million, or $1.66 per diluted share, for the first nine months of 2001, excluding one-time items. Operating revenues for the nine-month period of 2002 totaled $3.29 billion, an increase of 26 percent when compared with operating revenues of $2.61 billion for the same period in 2001.
"We are particularly pleased with the margin improvements across all of our real estate-related business segments in the third quarter of 2002 versus 2001," stated Parker S. Kennedy, president of The First American Corporation. "Third quarter real estate-related activities, including existing and new home sales, and refinancing activity, proved very favorable for First American. Recent record-breaking low mortgage interest rates should further stimulate the demand for homes and refinancings well into 2003, resulting in a strong fourth quarter for our company."
Open orders in the title insurance segment for the past three months were up 39 percent compared with the same period in 2001 and 32 percent compared with the second quarter of 2002. The company experienced record-setting refinance-related orders during the third quarter. The Mortgage Bankers Association of America's measure of mortgage loan applications for purchases and refinances were the highest ever in the past four weeks.
Kennedy continued: "While enjoying record-breaking transaction volume, we continue to look for opportunities to improve margins, increase automation and provide higher valuation for First American. The rollout of the FAST Transaction System, which will streamline title production and improve margins, will be substantially complete by year-end. Expense cutting continues as we consolidate operations and use technology to lower personnel expenses and deliver information products faster and more economically to our customers."
Source: The First American Corporation