SANTA ANA, Calif. – First American Financial Corporation (NYSE: NYSE:), a leading provider of title, settlement, and risk solutions for real estate transactions, reported a decline in its first-quarter earnings and revenue.
The company posted an adjusted earnings per share (EPS) of $0.45, falling short of analysts’ expectations of $0.64. Revenue for the quarter was $1.42 billion, also below the consensus estimate of $1.45 billion.
In comparison to the same quarter last year, total revenue decreased by 1%, with the Title Insurance and Services segment experiencing a 2% drop. This segment’s investment income fell by 6%, and commercial revenues declined by 4%. The company’s Home Warranty segment, however, showed a slight improvement with a 1% increase in total revenues.
Ken DeGiorgio, CEO of First American Financial, attributed the weaker performance to challenging market conditions in the real estate and mortgage industries, which remained subdued due to elevated mortgage rates and low inventory levels. Despite these headwinds, the company has continued to invest in strategic initiatives aimed at long-term growth, such as expanding title plant assets and developing technology solutions.
The company’s pretax margin for the Title Insurance and Services segment was reported at 5.5%, or 4.8% on an adjusted basis, which includes a $6 million write-off of uncollectible balances. The Home Warranty segment’s pretax margin improved to 19.3%, or 18.8% on an adjusted basis.
First American Financial’s commitment to its workforce and culture was underscored by its ninth consecutive recognition as one of the 100 Best Companies to Work For by Great Place to Work® and Fortune Magazine.
As for the future, DeGiorgio expressed that while market challenges are expected to persist throughout the year, the company anticipates modest revenue growth and title margins similar to those achieved in 2023.
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