Published in
M2 PressWIRE
on Friday, 09 May 2008 at
18:04 GMT
Copyright (C) 2008, M2 Communications Ltd.
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Stewart Information Services Corp. was down less than $0.80 on below average volume early trading Friday, May 9, 2008. They recently announced the following:
Friday, May 9, 2008 - Stewart Information Services Corporation reported updated results of operations for the quarter ended March 31, 2008. The update to first quarter earnings is related to an agency defalcation of which senior management of the Company became aware subsequent to the Company's earnings release dated April 30, 2008 and prior to filing its Form 10-Q with the Securities and Exchange Commission. The impact of this agency defalcation resulted in a pretax charge of $4.6 million ($3.0 million after taxes, or $0.16 per share). The information presented herein has been updated, as necessary, to reflect the impact of this matter. There are no other updates to previously reported amounts. (Dollar amounts in the table below are in millions, except for per share figures.)
First Quarter 2008(b) 2007(a)
Total revenues $ 394.1 $ 531.7 Pretax loss before minority interests (40.9) (4.6) Net loss (25.2) (4.8) Net loss per share (1.40) (0.26)
(a) Includes a $3.2 million gain ($2.1 million after taxes, or $0.11 per share) from the sale of two subsidiaries. Also includes a charge of $5.1 million ($3.3 million after taxes, or $0.18 per share) relating to four large title losses.
(b) Includes a charge of $4.6 million ($3.0 million after taxes, or $0.16 per share) related to an agency defalcation.
Financial Highlights
-- Revenues decreased 25.9 percent to $394.1 million in the first quarter of 2008 compared with $531.7 million for the first quarter of 2007.
The Company reported a loss before taxes (and before minority interests) of $40.9 million for the first quarter of 2008 compared with a loss of $4.6 million for the same period in 2007.
-- The revenue decline in 2008 was due to a significant decrease in title orders resulting from a decline in home sales and reduced financing activity relating primarily to tightening of mortgage lending practices and issues in the credit market, as well as lower home prices.
-- The Company continues to respond aggressively to the decline in the real estate market and is taking appropriate steps to restore profitability. In addition to workforce reductions, the Company continues to consolidate branch offices and locations, and is pursuing the completion of title search and production efficiencies company-wide. The Company's shared services initiative also remains on target and will generate benefits during 2008 in the areas of procurement and information technology infrastructure by reducing costs and enhancing service levels.
-- Excluding acquisitions, divestitures and startups, the Company has reduced its employee count since December 31, 2005 by approximately 2,500, or 24.8 percent. The Company reduced its employee count during the first quarter of 2008 by approximately 460, or 5.4 percent. The Company will continue to incur significant costs relating to conversion of its technology to more efficient platforms. Although other operating expenses have declined, they have not declined at the same rate as revenues due to the relatively fixed nature of some of these costs, such as rent and other occupancy expenses, and costs associated with our growing, profitable international and commercial businesses.
-- Stewart's book value per share decreased to $40.31 at March 31, 2008 compared with $41.82 at December 31, 2007.
-- Title orders declined in the first quarter of 2008 by 13.0 percent from the same period a year ago. Orders were 26.3 percent lower in March 2008 than in March 2007.
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Release date: 09 May 2008
