Santa Ana-based First American Financial Corp. posted a better than expected fourth-quarter profit, while officials for the title insurance company are bracing themselves for declines in business related to mortgage originations this year.
First American, which completed its split with Santa Ana’s CoreLogic Inc. in June, said on Thursday it earned $47 million for the quarter.
The figure was off about 6% from a year earlier but still exceeded Wall Street expectations by nearly 50%.
Revenue came in at $1 billion, flat from a year earlier and beating expectations by about 5%.
First American writes policies protecting owners of homes and other real estate from competing claims of ownership.
That business line posted its strongest quarterly results since late 2006, with a pretax margin of 8.6%, officials said.
The improvements were due to improved efficiencies, strong commercial activity and a robust refinance market, Chief Executive Dennis Gilmore said.
Still, the company warned that this year could hold challenges.
“While the 2011 outlook for the mortgage and real estate markets remains uncertain, we are positioning the company for a significantly lower mortgage origination market,” Gilmore said in a statement.
As a result, the company said it would maintain a conservative balance sheet this year, while “capitalizing on strategic investment opportunities in our core business.”
Shares of First American, which counts a market value of about $1.6 billion, were down about 2% for the day.
