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Fidelity National (FNF) Q4 Earnings Beat, Revenues Miss

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Fidelity National Financial, Inc. (FNF - Free Report) reported fourth-quarter 2021 operating income per share of $2.16, which outpaced the Zacks Consensus Estimate by 35%. The bottom line increased 7.5% on a year-over-year basis.

Results gained on the back of growth in revenues and strong performances across its Title and F&G segments. However, the upside was partly offset by elevated expenses.

Fidelity National Financial, Inc. Price, Consensus and EPS Surprise

Behind the Headlines

Operating revenues increased 16% year over year to $3.2 billion in the quarter, attributable to improved title and escrow revenues coupled with higher interest and investment income. The top line however missed the Zacks Consensus Estimate of $3.4 billion.

Interest and investment income of $537 million increased 49.5% year over year.

Total expenses increased 44.7% year over year to $4.1 billion due to escalated personnel costs, agent commissions, other operating expenses, depreciation and amortization, claims loss expense and interest expense.

Segment Results

Total revenues at Title climbed 16.1% year over year to $3.2 billion. While direct title premiums improved 21.3% year over year to $1 billion in the quarter, agency title premiums surged 22.5% year over year to $1.4 billion. Also, escrow, title-related and other fees of $795 million climbed 2.6% year over year in the quarter under review.

Adjusted pre-tax title margin came in at 22.4%, which expanded 30 basis points (bps) year over year due to contraction in refinance volumes.

On a daily basis, while refinance orders opened declined 44% year over year, refinance orders closed declined 39% year over year. Purchase orders opened and purchase orders closed increased 2% and 4%, respectively, year over year on a daily basis. However, the total fee per file for the quarter increased 43% year over year to $3,023 during the quarter.

Total revenues at F&G were $1.3 million during the quarter, up more than a three-fold year over year. Total retail annuity sales climbed 5% year over year to $1.4 billion, while fixed indexed annuities (FIA) sales of $1.1 billion grew 11.4% year over year in the quarter.

Average assets under management (AUM) amounted to $35.7 billion at quarter-end, up 28% from the fourth-quarter 2020 figure attributable to net new business asset flows.

Financial Update

Fidelity National exited 2021 with a cash and investment portfolio of $47.2 billion, up 24.8% from the 2020-end level. As of Dec 31, 2021, notes payable increased 16.3% to $3.1 billion from the figure at 2020 end.

Stockholders’ equity of $9.4 billion increased 12.7%% from the figure as of Dec 31, 2020.

In 2021, Fidelity National bought back 10.2 shares worth $461 million.

Zacks Rank

Fidelity National currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property & Casualty Insurers

Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.

Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.

Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.

RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.

RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.

Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.

Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.