First American Financial (FAF) Q4 Earnings & Revenues Beat
Zacks Investment Research | Feb 14, 2020 01:29AM ET
First American Financial Corporation (NYSE:FAF) reported fourth-quarter 2019 operating income per share of $1.80, which outperformed the Zacks Consensus Estimate by 33.3%. Moreover, the bottom line improved 41.7%.
Increase in investment income and improved segmental performance were partially offset by increase in expenses.
First American Financial Corporation Price, Consensus and EPS Surprise
Behind the Headlines
Operating revenues of $1.7 billion increased 22% year over year and beat the Zacks Consensus Estimate by 6.9%.
Net investment income grew 24.5% to $78.8 million.
Closed title orders increased 27%, attributable to 131% increase in refinance orders.
Average revenue per order decreased 8%, driven by the shift to refinance transactions.
Total expense of $1.4 billion increased 10.9% year over year, attributable to increase in personnel costs, premiums retained by agents, other operating expenses, premium taxes and interest.
Full-Year Highlights
Operating income per share of $5.76 outpaced the Zacks Consensus Estimate of $5.38. Moreover, the bottom line surged 25.8%.
Revenues of $6.2 billion increased 8% from 2018 and beat the Zacks Consensus Estimate by 1.8%.
Segment Results
Title Insurance and Services: Total revenues increased 21.1% year over year to $1.6 billion.
Pre-tax margin expanded 740 bps.
Direct open orders increased 24.4% to $251.7 billion while Direct closed orders increased 27% to $224.2 billion year over year.
Specialty Insurance: Total revenues increased 17.9% year over year to $131.6 million.
Pre-tax margin was 16.7%, much higher than 0.7% in the year-ago quarter.
Financial Update
First American exited 2019 with cash and cash equivalents of $1.5 billion, up 1.3% year over year. Notes and contracts payable were $728 million, down 0.5% year over year.
First American exited 2019 with stockholders’ equity of $4.4 billion, up 18.1% year over year.
Return on equity was 17.3% in 2019.
Cash flow from operations was $913.1 million, up 15% from 2018.
Zacks Rank
First American currently has a Zacks Rank #3 (Hold). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.