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Fidelity National (FNF) Q4 Earnings, Revenues Top Estimates

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Fidelity National Financial FNF reported fourth-quarter 2020 operating income per share of $2.01, which beat the Zacks Consensus Estimate by 60.8%. Also, the bottom line more than doubled year over year.

However, shares of the company dropped 7.3% in the last couple of trading sessions.

The quarter benefited from solid results at Title and F&G segment. However, expenses witnessed an increase.

Behind the Headlines

Operating revenues of $3.8 billion increased about 60% year over year on the back of higher Title revenues and interest and investment income. Moreover, the top line beat the Zacks Consensus Estimate by 26.9%.

Interest and investment income increased 47% to $359 million.

Total expense of $2.8 billion increased 22.8% year over year largely due to higher personnel costs and agent commissions.

Segment Results

Total revenues at Title increased 30.4% year over year to $3 billion. Direct premiums increased  29% and agency revenues improved 33%, %.and eEscrow title-related and other fees increased 21% year over year.

Adjusted pre-tax title margin of 22.7% expanded 640 bps year over year. The company continues to benefit from low interest rates driving sustained momentum in refinance volumes, strong purchase demand and the continued rebound in commercial real estate activity.

Refinance orders opened increased 90% while refinance orders closed increased 86%. Purchase orders opened increased 14% while purchase orders closed increased 18%. However, average fee per file of $2,116, declined 11% year over year.

Total revenues at F&G increased  to $667 million. Total retail annuity sales of $1.3 billion increased 42% year over year while fixed indexed annuities (FIA) sales of $947 million increased 19%. Average assets under management (AAUM) of $27.9 billion increased from $27 billion in the third quarter driven by net new business asset flows

Financial Update

Fidelity National exited the quarter with cash and cash equivalents of $37.7 billion, up  increased more than six-fold from 2019 end. Notes and contracts payable were $2.6 billion, up more than three-fold from 2019 end.

Stockholders’ equity was $8.4 billion, up 55.2% from 2019 end.

In 2020, the company bought back $244 million worth shares.

Zacks Rank

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

Performance of Other Insurers

Of the insurance industry players that have reported fourth-quarter results, The Travelers Companies TRV, W.R. Berkley Corporation WRB and Progressive Corporation PGR beat the Zacks Consensus Estimate for earnings.

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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
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