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Stewart Information (STC) Q2 Earnings Miss Estimates
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Stewart Information Services Corporation's (STC - Free Report) second-quarter 2016 earnings of 49 cents per share missed the Zacks Consensus Estimate by 43%. The bottom line also plunged 31.9% year over year. The underperformance is attributable to lower revenues that offset the impact of lower expenses in the quarter.
Operating revenues of Stewart Information Services totaled $483.6 million, down 8.2% year over year. Total revenue declined 8% to $489.4 million, lagging the Zacks Consensus Estimate of $600 million. The decline was largely attributable to a 6.1% fall in title insurance revenues and a 38% decrease in ancillary services revenues. A 2.5% dip in revenues from direct operations and a 9.7% decline in agency operations in turn resulted in the reduced title insurance revenues.
Employee costs decreased 10.9% year over year. As a percentage of total operating revenues, employee costs decreased 96 basis points to 31.5% in the reported quarter.
Pre-tax earnings of Stewart Information Services surged nearly 35.2% year over year to $41.9 million due to continued benefit from cost management program.
Title Segment’s pre-tax income of $51.7 million was up 11% from $48.5 million in second-quarter 2015. The company’s cost-control measures and an improvement in title policy loss experience drove the upside.
Financial Update
Cash and cash equivalents were worth $137.2 million at quarter end, down 23.3% from year-end 2015.
Notes payable were $127.7 million as of Jun 30, 2016, up 24.7% from year-end 2015.
Cash from operations totaled $50.3 million, up 55.2% year over year.
Dividend Payout
In the quarter, Stewart Information Services paid a dividend of $0.30 per common share.
Zacks Rank
Stewart Information Services presently carries a Zacks Rank #5 (Strong Sell). The stock is currently trading at $42.89. We wait to see how the stock fares in the trading session following the earnings announcement.
Among the other players in the insurance industry that have reported their earnings so far, the bottom line at Brown & Brown Inc. (BRO - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimate, while Progressive Corp.’s (PGR - Free Report) earnings missed the same.
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Stewart Information (STC) Q2 Earnings Miss Estimates
Stewart Information Services Corporation's (STC - Free Report) second-quarter 2016 earnings of 49 cents per share missed the Zacks Consensus Estimate by 43%. The bottom line also plunged 31.9% year over year. The underperformance is attributable to lower revenues that offset the impact of lower expenses in the quarter.
Performance in Detail
Operating revenues of Stewart Information Services totaled $483.6 million, down 8.2% year over year. Total revenue declined 8% to $489.4 million, lagging the Zacks Consensus Estimate of $600 million. The decline was largely attributable to a 6.1% fall in title insurance revenues and a 38% decrease in ancillary services revenues. A 2.5% dip in revenues from direct operations and a 9.7% decline in agency operations in turn resulted in the reduced title insurance revenues.
Employee costs decreased 10.9% year over year. As a percentage of total operating revenues, employee costs decreased 96 basis points to 31.5% in the reported quarter.
Pre-tax earnings of Stewart Information Services surged nearly 35.2% year over year to $41.9 million due to continued benefit from cost management program.
Title Segment’s pre-tax income of $51.7 million was up 11% from $48.5 million in second-quarter 2015. The company’s cost-control measures and an improvement in title policy loss experience drove the upside.
Financial Update
Cash and cash equivalents were worth $137.2 million at quarter end, down 23.3% from year-end 2015.
Notes payable were $127.7 million as of Jun 30, 2016, up 24.7% from year-end 2015.
Cash from operations totaled $50.3 million, up 55.2% year over year.
Dividend Payout
In the quarter, Stewart Information Services paid a dividend of $0.30 per common share.
Zacks Rank
Stewart Information Services presently carries a Zacks Rank #5 (Strong Sell). The stock is currently trading at $42.89. We wait to see how the stock fares in the trading session following the earnings announcement.
STEWART INFO SV Price, Consensus and EPS Surprise
STEWART INFO SV Price, Consensus and EPS Surprise | STEWART INFO SV Quote
Results of Other Insurers
Among the other players in the insurance industry that have reported their earnings so far, the bottom line at Brown & Brown Inc. (BRO - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimate, while Progressive Corp.’s (PGR - Free Report) earnings missed the same.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>