CoreLogic posted net income of $31.48 million for the second quarter of 2011, an increase of nearly 29% from 2Q10's net income of $24.41 million. But the higher earnings were off lower revenue, $396.4 million in 2Q11, compared to $411 million in 2Q10.
CoreLogic's Business and Information Services segment saw its revenue decline to $199.8 million, from $228.1 million in 2Q11, the result of “significant declines in appraisal and broker price opinion business reflecting client losses, changing market dynamics and general declines in industry origination and problem loan volumes.”
“Regulatory and economic concerns have constrained the volume of mortgage originations despite low interest rates and record levels of single-family home affordability,” said Anand Nallathambi, CoreLogic president and CEO, in an earnings press statement. “As a result, we did not experience the typical degree of seasonality in the second quarter. These effects, and lack of typical seasonality, negatively impacted our quarterly results on a year-over-year basis, and make us increasingly cautious in our outlook for the remainder of the year.”
Santa Ana, Calif.-based CoreLogic said it recorded acquisition-related gains of $58.9 million on its existing investment in RP Data. CoreLogic increased its stake from 40% to full ownership of the Australian residential and commercial property information service provider in May.
In addition, CoreLogic said the write-off of deferred financing costs associated with the company's prior credit facility of $10.2 million was another gain in the quarter.
CoreLogic said the
Brett Horn, the associate director of the equity research department at Morningstar, wrote Friday that the investment research firm is placing CoreLogic under review, “to reassess our short-term and long-term profitability assumptions, although we do not expect to make a dramatic reduction in our fair value estimate.”
“Our biggest long-term concern is that the changing economics could be a long-term headwind for the appraisal business generally. On the other side, the company announced it is on track with its efforts to improve its cost structure; in our opinion, these efforts could have a material impact on profitability that could largely offset CoreLogic's current issues.”
