LPS Profits in 4Q12 Although Default Services Down
Lender Processing Services had net earnings of $2.8 million for the fourth quarter and $70.4 million for the full year of 2012, even though revenue declined 2.1% from 4Q11 as default services income fell 26% due to a drop in foreclosure starts.
For the same periods in 2011, LPS lost $21.2 million and earned $96.5 million, respectively.
Fourth-quarter results were adjusted for charges totaling $0.69 per share, including $0.33 for estimated legal and regulatory contingencies.
At the end of January, LPS agreed to pay 44 states and the District of Columbia $121 million to settle claims of unlawful foreclosure practices, including robo-signings.
Still, revenue for origination technology was up over 20% because of higher refinance volumes. Servicing technology revenue increased by 7% and default technology volume was up 3%.
"LPS enters 2013 a stronger company that is increasingly well positioned to enhance the mortgage value chain and deliver innovative technology, data and expertise to our clients," said Hugh Harris, president and chief executive. "The rapidly evolving mortgage landscape continues to create new requirements for our clients that result in significant long-term growth opportunities for LPS."
"We are extremely pleased with the recent conclusion of many of the company's legacy legal and regulatory matters which allows us to focus more of our time and energy on growth and innovation. LPS' technology leadership, scale and commitment to compliance excellence provide significant strategic advantages. We are confident these unique capabilities, together with our company's strong cash flow and disciplined capital allocation, will create significant long-term value for our stakeholders."