LPS Earnings Up, but Revenue Falls

Lender Processing Services Inc., the Jacksonville, Fla.-based technology company being acquired by Fidelity National Financial, had net earnings of $19.1 million for 2Q13, compared with a net loss of $37.9 million one year prior.

The Technology, Data & Analytics segment saw its revenue increase 6% over the prior year, although overall revenue at the company was down nearly 9% to $469 million. The drop came in the Default Services segment at LPS. Origination Services, on the other hand, also had an increase in revenue.

"LPS' positive performance reflects solid demand for Technology Data & Analytics solutions and strong Origination Services volumes as we benefitted from continued low interest rates and elevated refinance activity during most of the quarter," commented chief financial officer Tom Schilling.

"As a result of rising mortgage interest rates late in the second quarter, refinance volumes were negatively impacted in June and July. We expect Origination Services revenue to decrease sequentially in the third quarter based on these trends. As we have in prior market cycles, we will continue to rigorously manage expenses to reduce the impact of lower Origination and Default Services transaction volumes on profitability," he said.

LPS said that third-quarter revenue should be in the range of $415 million to $435 million. It expects Origination Services revenue to be down because of the rising interest rate environment leading to fewer refinancings.