Yahoo Finance Fidelity National (FNF) Q4 Earnings Miss, Title Volume Falls
Fidelity National Financial, Inc. FNF reported fourth-quarter 2022 operating income per share of $1.06, which missed the Zacks Consensus Estimate by 17.2%.
The bottom line decreased 50.9% on a year-over-year basis due to Title’s significant decline in volume, partially offset by a higher average fee per file.
Fidelity National Financial, Inc. price-consensus-eps-surprise-chart | Fidelity National Financial, Inc. Quote
Behind the Headlines
Operating revenues decreased 46.9% year over year to $2.6 billion in the quarter, attributable to lower title and escrow revenues and F&G revenues. The top line missed the Zacks Consensus Estimate by 10.8%.
Interest and investment income of $539 million increased 0.4% year over year.
Total expenses decreased 38.8% year over year to $2.5 billion due to lower personnel costs, agent commissions, other operating expenses, depreciation and amortization, claims loss expense and interest expenses.
Segment Results
Total revenues at Title plunged 44.5% year over year to $1.8 billion. While direct title premiums fell 47% to $544 million in the quarter, agency title premiums decreased 48% year over year to $708 million. Escrow, title-related and other fees of $508 million declined 36% in the quarter under review.
Adjusted pre-tax title margin came in at 12.3%, which contracted 1010 basis points (bps) year over year due to a fall in refinance volumes.
Purchase orders opened decreased 31% on a daily basis. Purchase orders closed decreased 36%. Refinance orders opened fell 76% on a daily basis and refinance orders closed decreased 76%. Commercial orders opened declined 30% and commercial orders closed decreased 34% The total fee per file of $3,649 in the fourth quarter increased 21% year over year.
Total revenues at F&G were $2.7 billion during the quarter, up 23% year over year, reflecting record retail sales, partially offset by lower institutional sales. Total retail sales of $2.5 billion increased 79%. Institutional sales of $0.2 billion were down 75% year over year.
Average assets under management (AUM) amounted to $42.6 billion at quarter-end, up 19% year over year, driven by net new business flow.
Financial Update
Fidelity National exited 2022 with a cash and investment portfolio of $47.7 billion, up 1.1% from the 2021-end level. As of Dec 31, 2022, notes payable of $3.2 billion were up 4.6% from the figure at 2021 end.
Stockholders’ equity of $5.6 billion decreased 50.3% from the figure as of Dec 31, 2022.
In 2022, Fidelity National bought back 13.5 million shares worth $549 million and paid out $489 million in dividends.
Zacks Rank
Fidelity National currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Property & Casualty Insurers
The Travelers Companies, Inc. TRV reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s PGR fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
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