Santa Ana-based title insurer and business data provider First American Corp. posted a lower fourth-quarter profit that beat Wall Street’s expectations while revenue came in below what analysts were looking for.
First American reported a profit of $9.3 million after charges and onetime items that beat the $6.5 million analysts were expecting.
With writedowns, cash for financial reserves and restructuring costs, First American lost $66.9 million in the quarter.
Revenue fell 28% from a year earlier to $1.35 billion, missing the $1.43 billion analysts were expecting.
Shares of First American were up about 4% at the opening of New York trading on a market value of $2.2 billion.
The company said during a call with analysts that it is starting to see an increase in title insurance thanks to low mortgage rates, and that it is doing more foreclosure-related work for lenders.
The company declined to give guidance for its first-quarter earnings outlook.
First American’s dominant title insurance business, which writes policies protecting home and other real estate owners from competing claims of ownership, continues to struggle amid the downturn.
Title insurance revenue fell 32% in the fourth quarter to $812 million as fewer policies were issued and prices fell.
Revenue for an average title policy was $1,462, down 19% from a year earlier.
The title insurance unit saw most of First American’s restructuring in the quarter.
Salary and other employment costs were down 35% to $258 million on job cuts, salary reductions, modified bonuses and benefit cuts.
The title insurance unit cut 1,210 workers during the quarter, bringing First American’s cuts for the year to 4,100, or 11% of its work force.
“We responded aggressively and decisively to restructure our company in the face of a very difficult economic environment,” Chief Executive Parker “Park” Kennedy said.
The company is encouraged by the federal government’s efforts to shore up the housing market and is seeing increased orders, Kennedy said.
First American had planned to spin off its title insurance business but scrapped the effort in July amid the industry downturn and poor conditions on Wall Street.
