Lender Processing Services posted net earnings of $40.5 million in the third quarter, down 49% from a year ago as increased revenue from its technology and analytics unit couldn't compensate for higher costs in its loan transaction services unit.
LPS took in $532 million of revenue, down 14% year-over-year. However, revenues increased 4% from 2Q11.
Operating income fell to $90 million, a 32% decline from last year, but a 15% gain from 2Q.
LTS revenue of $340 million fell 21% from $431 million in 3Q10. The LTS unit includes divisions that provide services to both originators and servicers. Operating income of $61 million is down 37% from $97 million last year, mainly due to decreases from Default Services, “and to a lesser extent,” Loan Facilitation Services, the company said.
Revenue in Loan Facilitation Services of $141 million is down 15% from 3Q10, which LPS said is better than the Mortgage Bankers Association's estimate of a 23% overall decline in total originations.
Revenue in Default Services is down 25% year-over-year to $199 million, which LPS said is consistent with RealtyTrac's estimate of a 27% decline in third-quarter default notices from 2010.
Jacksonville, Fla.-based LPS said its net corporate expenses increased 72% to $34 million, “primarily due to higher legal and compliance-related expenses.”
TD&A revenue of $194 million rose 3% in 3Q11, from $188 million a year ago, due to higher professional service revenues in its mortgage processing unit. This division provides servicing and origination software and includes its Empower product.
But TD&A operating income of $63 million is down 8% from $68 million in 3Q10, the result of lower income from ancillary services and technology on the servicing side, offset by increases in data and analytics income.
