Mortgage Vendor CoreLogic Posts Record Results

CoreLogic earned $41 million off revenue of $389 million during the second quarter of 2012—new records for the company which was spun off from the First American Corp. in June 2010.

The 19% year-over-year growth in quarterly revenue came as Santa Ana, Calif.-based mortgage vendor experienced double-digit growth in all operating segments, including a 29% increase in its mortgage origination services unit and a 14% increase in its default services business.

Net income was up about 2% from 2Q11, when CoreLogic posted net income of $40.3 million, though the year-ago quarter’s profit was primarily due to an after-tax gain from its acquisition of RP Data. The 2Q12 net income benefited from increased revenue, as well as significant cost reductions, the later of which totaled $35 million during the first half of 2012.

“Profitable top-line growth and cost reductions are driving significantly higher margins in all of our business segments,” said CoreLogic president and CEO Anand Nallathambi, in a statement released after market close on Monday.

CoreLogic’s stock opened up about 4% from Monday’s close price of $20.76.

Cost reductions and consolidation have been key areas of focus for the firm. In late 2011, the company announced a plan to exit nonprofitable businesses, improve efficiencies and invest in product innovation. Dubbed “Project 30,” CoreLogic said its efforts are expected to generate earnings before interest, tax, depreciation and amortization of 30% through 2013. In 2Q12, the margin of EBITDA to revenue was 32%.

The strong results comes a month after a 10-month-long standoff between CoreLogic and its largest investor, Highfields Capital Management, which resulted in the addition of new independent directors being added to CoreLogic’s board and the resignation and announced retirement of chairman D. Van Skilling.

Still, the positive outlook was not entirely unexpected. As National Mortgage News reported earlier this year, despite the investor pressures, continued mortgage refinancing activity, internal cost cutting and the introduction of new products has indeed helped improve financial conditions, leaving financial analysts projecting long-term upside for CoreLogic.