The First American Corporation Reports Record Results for the Third Quarter 2005
October 27, 2005
SANTA ANA, Calif., /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF), the nation's largest data provider, today announced results for the third quarter ended Sept. 30, 2005:
|Three Months Ended
|Total revenues||$2.17 billion||$1.72 billion|
|Income before income taxes and minority interests||$275.4 million||$202.0 million|
|Net income||$149.1 million||$107.2 million|
|Net income per diluted share||$1.51||$1.17|
Nine Months Ended
|Total revenues||$5.86 billion||$4.92 billion|
|Income before income taxes and minority interests
||$694.6 million||$532.3 million|
|Net income||$367.8 million||$278.7 million|
|Net income per diluted share||$3.79||$3.07|
"The company posted record revenue and profits for the third quarter," stated Parker S. Kennedy, chairman and chief executive officer of The First American Corporation. "The company's positive performance was affected by strong mortgage origination volume, particularly from purchase activity, as well as our ongoing commitment to maximize operating efficiencies, reduce costs and improve market share."
"During the third quarter, we contributed First American's Credit Information Group (CIG) to First Advantage Corporation (Nasdaq: FADV). First American now owns 80 percent of First Advantage. With the addition of CIG, First Advantage's market capitalization has grown to more than $1.4 billion, with an estimated $600 million in annual revenue. CIG also provides First Advantage with opportunities to grow through larger acquisitions and, organically, through new markets and cross-selling opportunities."
Quarterly Financial Highlights
Financial Services Group:
- Revenues for the third quarter 2005 were $1.70 billion, an increase of 30.3 percent when compared with revenues of $1.30 billion for the third quarter of 2004.
- Pretax income was $209.2 million, an increase of 58.6 percent when compared with $131.8 million in the prior year quarter.
- Pretax margins increased to 12.3 percent compared with 10.1 percent for the third quarter 2004.
Information Technology Group:
- Revenues for the third quarter 2005 were $466.1 million, an increase of 12.2 percent compared with revenues of $415.3 million for the third quarter of 2004.
- Pretax income was $104.2 million, a decrease of 1.1 percent when compared with third quarter 2004 income of $105.3 million.
- Pretax margins decreased to 22.3 percent compared with 25.4 percent for the third quarter 2004.
- The current quarter included $9.1 million of pretax costs related to the company's default division, which is included in the Mortgage Information Segment. These costs include expenses associated with relocating and consolidating operations, the write-down of certain software and other related expenses. The prior year quarter included a one-time benefit of $13.0 million for the Mortgage Information Segment.
Kennedy added: "We will continue our strategic initiatives of technology, centralization, bundling, offshore processing and analytics to maintain strong margins, particularly in title insurance. We will pursue strategic acquisitions that will enhance production efficiencies, increase market share and create opportunities to leverage our expansive real estate data to create unique products and services."
Source: The First American Corporation