The First American Corporation Reports Results for the First Quarter 2006
April 26, 2006
SANTA ANA, Calif., /PRNewswire-FirstCall / -- The First American Corporation (NYSE: FAF), announced results for the first quarter ended March 31, 2006:
|For the Three Months Ended March 31|
|Total revenues||$2.0 billion||$1.7 billion|
|Incomeefore income taxes and minority interests||$137.7 million||$153.7 million|
|Net income||$69.7 million||$79.2 million|
|Net income per diluted share||$.71||$.83|
"Revenues for the first quarter of 2006 were strong. We are especially pleased with the revenue growth in our title insurance, specialty insurance, property information, and risk mitigation and business solutions segments, all of which had quarter-over-quarter operating increases of 17 percent or more, despite a lower level of mortgage origination activity," stated Parker S. Kennedy, chairman and chief executive officer of The First American Corporation. "Approximately 51 percent of the company's income before income taxes and minority interest was derived from businesses outside the title insurance arena, and our diversification into data businesses that are less interest rate sensitive is helping accelerate our company's revenue growth.
"Though strong, earnings did not keep pace with the revenue growth for the quarter. Factors affecting results included an increase in the loss provision rate for the title insurance operations and continued investments in new business initiatives.
"In early April of 2006, we acquired TransContinental Title Company, which will complement our National Lenders Advantage Operation and increase First American's overall presence in the lending market. Combined, these divisions will drive revenue growth by offering mortgage originators two highly effective channels for complete title and settlement services. We also formed a new division, the First American International Services Group, comprised of offshore resources dedicated to providing a wide selection of high-quality, cost-effective offshore services to the mortgage industry."
2006 Outlook and Strategic FocusKennedy added: "We will continue our strategic plan of integrating and consolidating successful companies for profitable growth. We will continue to execute on our operational strategies such as developing analytics and technology solutions, centralization and offshore processing to enhance earnings and margins. We believe the prospects for First American in 2006 and in the years to come create significant upside potential for our company and shareholders."
Summary of Operations
Source: The First American Corporation