Headlines:
Fidelity National Tech Profit Up
Pretax profits of Fidelity National Financial Inc.'s bank technology operations jumped 38% from a year earlier in the second quarter but failed to offset a drop at the company's main business, title insurance.
The Jacksonville, Fla., company entered the technology business in April 2003 by buying Alltel Information Services and has made a series of acquisitions since then.
Over all, net second-quarter earnings slipped 11%, to $222.1 million, the company reported Thursday. The per-share figure, $1.26 topped the average analyst estimate of $1.14. Revenue climbed 10%, to $2.2 billion, reflecting growth in both businesses.
A brief conference call provided scant news about plans announced in May to spin off the technology operations. Executives took no questions, saying the company was in pre-offering quiet period.
Chairman and chief executive William P. Foley 2d said only that the prospectus for the spinoff company, to be known as Fidelity National Information Services Inc., had been amended in response to comments from the Securities and Exchange Commission.
He offered no timetable for the spinoff except to say, "We plan to proceed as quickly as the SEC and the capital markets allow."
Pretax profit of the technology operation climbed $12.2 million, to $44.6 million, but that of the title insurance business sank $52.1 million, to $259.8 million.
Revenue rose at both arms of the business - by 36%, to $300 million, in the technology operation and by 10%, to $1.5 billion, in the insurance business.
The profit drop in title insurance was attributed to the slowdown in mortgage refinancing - orders for title insurance dipped 26%, to 771,900- as well as acquisitions made in the last year.
"The challenge is to reduce the size of our title operations commensurate with order volumes," said Raymond R. Quirk, the company's president. "We have more work to do in reducing headcount, and we expect further reductions in the third quarter." The company had 15,900 employees at the end of the quarter, he said.
A historically high level of refinancing swelled mortgage volume last year, Mr. Quirk noted. "We are returning to a more solid, purchase-driven market with more modest refinancing," he said, but purchase mortgage volume remains at or near an all-time high.
Earnings Climb 21% at Fiserv
Fiserv Inc. of Brookfield, Wis., reported Thursday that its second-quarter earnings grew 21%, to $95 million, as revenue climbed 33%, to $855.9 million.
Per-share earnings of 48 cents beat the average of analysts' forecasts by a penny. Analysts had also projected less revenue - $842.1 million - for the financial technology outsourcer.
"We're on track for a record year in 2004, with a solid sales pipeline to fuel organic growth and a promising outlook for acquisitions," said Leslie M. Muma, Fiserv's president and chief executive, in a press release.
He highlighted the company's growing business in health plan management services, which contributed $18.7 million of operating income in the second quarter, 71% more than a year earlier. Revenue from the segment more than doubled, to $218.3 million,
Fiserv reiterated its expectation for full-year earnings of $1.87 to $1.93 per share. Analysts on average project $1.91.
