Stewart Information Services Corporation Reports First Quarter Results

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HOUSTON (April 25, 2000) -- Stewart Information Services Corporation (NYSE?STC) today reported a loss of $3.4 million for the three months ended March 31, 2000, compared to net earnings of $9.6 million for the first quarter of 1999. On a diluted per share basis, the loss was $.23 for the first quarter of 2000, compared to net earnings of $.67 for the first quarter of 1999. Revenues in the first quarter decreased 16 percent to $208 million from $248 million in the same period last year.

"Our results this quarter reflect the traditional first quarter slowness in real estate activity, and are not necessarily indicative of full year operations," said Stewart Morris, Jr., president and co-chief executive officer. "Residential loan applications were down 30 percent nationwide in the first quarter compared to the same period last year. In the past five years, first quarter home sales have averaged less than 20 percent of the annual total, resulting in first quarter losses at Stewart in eight of the past 16 years," he added.

Mr. Morris also said that higher interest rates further impacted home sales and refinancing activity. He noted that the 30-year fixed-rate residential lending rate increased to 8.3 percent in the quarter just ended from an average 6.9 percent in the first quarter last year. Finally, title insurance order counts in the first quarter of 2000 were down 18 percent from the same period last year, although they were off only 11 percent in March from a year ago.

Malcolm S. Morris, chairman and co-chief executive officer, added: "We have a sound strategy in place designed to capitalize on our strength in technology and customer service and we remain confident in our ability to grow market share in the U.S. and internationally. We are committed to making appropriate cost adjustments, enhancing product lines and speeding response time to our customers. This positions us to perform well in varying market conditions. Mortgage interest rates, which are expected to remain in the high 7 to mid 8 percent range, portend slower growth in real estate markets."

Demonstrating its commitment to technology, Stewart continues to expand in the electronic commerce arena. During the quarter, the company continued to enhance its e-commerce services, which range from real estate information services to employee screening services. Malcolm Morris said, "Stewart?s strategic initiative in e-commerce will augment our growth." Internet sites giving a view of the diverse services offered by Stewart include www.floodwaves.com, which facilitates the electronic ordering and tracking of flood determinations of more than 100 million properties in the United States, Virgin Islands and Puerto Rico. Another subsidiary, www.ldresearch.com, provides pre- and post-employment screening and background checks nationwide. Compliant electronically-delivered mortgage documents for all 50 states are provided at www.onlinedocuments.com. A complete umbrella of lender and mortgage services and products can be found at www.smiservices.com.

Stewart Information Services Corporation is a technology driven, strategically competitive, global real estate information company. Stewart provides title insurance and related services through more than 4,900 issuing locations in the United States and several international markets. A leading provider of real estate information technology and connectivity, Stewart meets the needs of the real estate and mortgage industries through the electronic delivery of services required for settlement. These services include title insurance, title reports, flood determinations, property appraisals, document preparation, credit reports and other real estate information. In addition, Stewart provides expertise in tax-deferred exchanges, surveys and field services. More information about Stewart can be found at www.stewart.com.

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SUMMARY OF OPERATIONS

 

Stewart Information Services Corporation

Three months ended March 31
2000
               1999

Revenues............. $ 208,203,000  $ 247,878,000

Net earnings (loss).....$ (3,354,000)  $ 9,600,000

Average shares-diluted......14,811,000  14,336,000

Earnings (loss)per share(1):

Basic..................... $(0.23) $0.68
Diluted................... $(0.23) $0.67

(1) Restated for a two-for-one stock split in May 1999.

 

 

Supplemental financial data:

(In thousands of dollars)

                               Three months
ended Mar 31
2000
     1999

Title premiums, fees and other revenues..191,176  227,716

Real estate information services.......... 12,199  15,091

Investment income.......................... 5,168   4,907

Investment gains - net......................(340)     164

Total revenues...........................208,203  247,878

Amounts retained by agents............... 90,839  112,134

Employee costs............................ 68,674  69,499

Other operating expenses.................. 39,061  36,461

Title losses and related claims............. 8,560  9,266

Depreciation and amortization............... 5,091  3,875

Interest.......................................381    286

Minority interests.............................944    990

Total expenses...........................213,550  232,511

Earnings (loss) before taxes............. (5,347)  15,367

Income taxes (benefit).................... (1,9935,767

Net earnings(loss)....................... (3,354)   9,600

======= =======

Segment information:

Title revenues.......................... 196,004  232,787

Title pretax earnings(loss).............. (3,656)  13,805

REI revenues.............................. 12,199  15,091

REI pretax earnings(loss)................. (1,691)  1,562

 

Mar 31 Dec 31
2000     1999

(in millions)

Total assets.................................525.3  535.7

Notes payable..................................22.2  19.1

Stockholders' equity ($19.17 per share at

March 31, 2000).............................. 283.1 284.9

 

April 25, 2000

 

 


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