Stewart Information Services Corp (STC) Reports Q3 2023 Earnings
Stewart Information Services Corp (NYSE:STC) reports Q3 2023 total revenues of $601.7 million, compared to $716.4 million in Q3 2022.
Net income for Q3 2023 stands at $14.0 million, a decrease from $29.4 million in the same period last year.
Diluted EPS for Q3 2023 is $0.51, compared to $1.08 in Q3 2022.
The company attributes the results to the slowdown in real estate market activity due to the higher interest rate environment.
Stewart Information Services Corp (NYSE:STC) released its Q3 2023 earnings report on October 25, 2023. The company reported total revenues of $601.7 million, a decrease from $716.4 million in Q3 2022. Net income for the quarter was $14.0 million, compared to $29.4 million in the same period last year. Diluted EPS for Q3 2023 was $0.51, compared to $1.08 in Q3 2022.
Financial Performance
The company's Q3 2023 and 2022 results included $1.9 and $6.4 million, respectively, of pretax net realized and unrealized losses primarily driven by net unrealized losses on fair value changes of equity securities investments in the title segment. The company's CEO, Fred Eppinger, commented on the results, stating,
Our third quarter results reflect the continuing slowdown in real estate market activity due to the higher interest rate environment coupled with the normal seasonality of late summer. As we expect that higher interest rates will continue for several quarters before beginning to moderate, we will continue to balance thoughtful cost discipline with investment in long-term enterprise initiatives."
Financial Tables
The company's financial information summary shows that for the nine months ended September 30, 2023, total revenues were $1,675.2 million, pretax income before noncontrolling interests was $42.1 million, and net income attributable to Stewart was $21.6 million. The adjusted net income attributable to Stewart was $49.4 million, and the net income per diluted Stewart share was $0.79.
Company's Analysis
The company's title segment operating revenues in Q3 2023 decreased by 19 percent compared to Q3 2022, due to transaction volume declines in the company's direct and agency title businesses. The company's real estate solutions segment's operating revenues in Q3 2023 decreased by 2 percent compared to Q3 2022, primarily as a result of lower valuation services revenues resulting from lower transaction volumes tied to the continuing elevated interest rate environment.
Other Details
Net cash provided by operations in Q3 2023 improved to $59.5 million compared to net cash provided by operations of $48.9 million in the prior year quarter, primarily driven by lower payments on claims and accounts payable, partially offset by the lower net income during Q3 2023. The company will hold a conference call to discuss the Q3 2023 earnings at 8:30 a.m. Eastern Time on Thursday, October 26, 2023.
Explore the complete 8-K earnings release (here) from Stewart Information Services Corp for further details.
This article first appeared on GuruFocus.
