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Fidelity National (FNF) Q1 Earnings & Revenues Beat, Up Y/Y

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Fidelity National Financial, Inc. FNF reported first-quarter 2021 operating income per share of $1.56, which outpaced the Zacks Consensus Estimate by 21.9%. Further, the bottom line more than doubled on a year-over-year basis.

However, shares of the company dipped 0.1% on May 7.

Nevertheless, the company’s results gained on the back of growing revenues and strong performances across its Title and F&G segments. However, the upside was partly offset by elevated expenses.

Behind the Headlines

Operating revenues soared 92.3% year over year to of $3.1 billion in the quarter attributable to improved title and escrow revenues coupled with higher interest and investment income. The top line also surpassed the Zacks Consensus Estimate by 4%.

In the quarter under review, interest and investment income of $402 million increased to nearly eight-fold year over year.

Total expenses increased 38% year over year to $2.3 billion due to escalated personnel costs, agent commissions, other operating expenses, depreciation and amortization, claims loss expense and interest expense.

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

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

Fidelity National Financial, Inc. price-consensus-eps-surprise-chart | Fidelity National Financial, Inc. Quote

Segment Results

Total revenues at Title climbed 56.3% year over year to $2.5 billion. While direct title premiums improved 36.6% year over year to $746 million in the quarter, agency title premiums surged 44.5% year over year to $1.1 billion. Also, escrow, title-related and other fees of $745 million climbed 22.1% year over year in the quarter under review.

Adjusted pre-tax title margin came in at 19.9%, which expanded 550 basis points (bps) year over year. The segment benefited from the continued rebound of commercial revenues stemming from rise in total commercial orders closed.

On a daily basis, while refinance orders opened rose 15% year over year, refinance orders closed more than doubled year over year. Purchase orders opened and purchase orders closed advanced 18% and 21%, respectively, year over year on a daily basis. However, average fee per file for the quarter fell 13% year over year to $1,944 during the quarter.

Total revenues at F&G were $539 million during the quarter. Total retail annuity sales climbed 57% year over year to $1.6 billion, while fixed indexed annuities (FIA) sales of $1 billion grew 26% year over year in the quarter. The segment was aided by record quarterly levels achieved with fixed indexed annuity sales. Bank and broker dealer channel remains well-poised for growth, which also benefited the segment.

During the quarter, average assets under management (AUM) amounted to $29 billion, up 3.9% from the fourth-quarter 2020 figure attributable to net new business asset flows.

Financial Update

The company exited the first quarter with cash and investment portfolio of $38.4 billion, up 1.7% from 2020-end level. As of Mar 31, 2021, notes payable remained unchanged at $2.7 billion from the figure at 2020 end.

Stockholders’ equity of $8.2 billion slipped 2% from the figure as on Dec 31, 2020.

Capital Deployment

During the reported quarter, the company bought back shares worth $111.9 million.

Concurrent with first-quarter results, the company’s board of directors approved a second quarter dividend of 36 cents per share. The new dividend will be paid on Jun 30, 2021 to shareholders of record as on Jun 16.

Zacks Rank

Fidelity National currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property & Casualty (P&C) Insurers

Of the P&C insurance industry players that have reported first-quarter results so far, the bottom line of Chubb Limited CB, RLI Corp. RLI and Kinsale Capital Group, Inc. KNSL beat the Zacks Consensus Estimate.

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RLI Corp. (RLI) : Free Stock Analysis Report

Chubb Limited (CB) : Free Stock Analysis Report

Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report

Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report

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