Fidelity National Financial late Wednesday reported that its profit for the fourth quarter of 2005 fell 34 percent, reflecting a tax on a stock distribution for its Fidelity National Title Group title insurance unit, which went public in October.
The Jacksonville, Fla.-based company said net income fell to $115.2 million, or 64 cents per share, from $174.9 million, or 98 cents.
Excluding the distribution, adjusted net income totaled $215.2 million, or $1.20 per share.
A group of analysts polled by Thomson Financial had forecast profit of 95 cents per share. It was not immediately clear whether that forecast was based on net or adjusted net income.
Revenue rose 16 percent to $2.43 billion, topping forecasts for $2.3 billion, and expenses increased 14 percent to $2.07 billion, the company said.
The company’s chief executive officer, William P. Foley II, described 2005 as “a year where we spent a great deal of time and effort attempting to maximize the value of the efforts of FNF.” In 2005, FNF was changed into a holding company with four subsidiaries – Fidelity National Title Group, Fidelity National Information Services, Specialty Insurance and Sedgwick CMS.
Fidelity National is the majority owner of Fidelity National Title, the largest U.S. title insurer with 31 percent of the market. FNT went public through the distribution of 17.5 percent of its stock to Fidelity National shareholders.
FNT on Wednesday said quarterly profit fell 13 percent to $126.4 million, or 73 cents per share. FNT raised its quarterly dividend by 16 percent to 29 cents per share.
Title and escrow premiums at FNT rose 10 percent to $1.52 billion. Direct orders that were opened fell 6 percent to 653,900 and those that were closed fell 4 percent to 517.900.
Personnel costs rose as FNT eliminated nearly 1,300 jobs, or about 8 percent of its title work force. More cuts are expected this quarter, the company said, as the mortgage market slows.
Fidelity National also offers software and services for financial institutions, as well as information services and specialty insurance.
Fidelity National stock was trading at $37.49 a share mid-morning Thursday on the New York Stock Exchange.
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