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First American Posts Profit In Q2
America’s largest provider of business information, First American Corp. posted a significant profit on its net income for the second quarter of 2008, as announced on Thursday. The figure even beats analyst’s expectation.
For the quarter ended June 30, the Santa Ana-based company reported a net income of $42 million, compared to a loss of $66 million during the same period a year ago. Analysts expected to earn about $37 million by the company.
Parker S. Kennedy, the Chairman and Chief Executive Officer of The First American Corp. said, “We are pleased by the performance of both the Financial Services and Information Solutions businesses in light of the current market environment,” “We are especially encouraged by the operating results within our Title Insurance segment. Clearly, these results reflect the hard work that began last year to restructure our Title operations and change our business model. We are focused in our commitment to maximize profitability in all of our businesses.”
The profits in the second quarter were due to reduced costs. It had reduced salaries and other personnel costs by 17 percent . Other operating expenses were also reduced by 12 percent.
Total expenses dropped to $1.6 billion from $2.2 billion a year earlier.
During the second quarter of 2007, the company’s costs totaled $172.8 million that included reserve strengthening, restructuring and asset impairments.
Total revenue fell 20 percent to $1.7 billion in the second quarter this year from $2.16 billion in the second quarter of 2007.
Revenue from the company’s core title business declined 25 percent to $1.19 billion from $1.58 billion.
First American’s information solutions segment posted revenue of $548.7 million, a 10 percent decrease from $608.6 million in the 2007 period.
First America’s market value is about $4.2 billion. On Thursday, its shares were up 12 percent at close of trading.