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Mittwoch, 26.07.2023 16:15 von PR Newswire | Aufrufe: 13

Stewart Reports Second Quarter 2023 Results

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PR Newswire

HOUSTON, July 26, 2023

Total revenues of $549.2 million ($550.3 million on an adjusted basis) compared to $844.1 million ($850.7 million on an adjusted basis) in the prior year quarter
Net income of $15.8 million ($18.9 million net income on an adjusted basis) compared to $61.7 million ($70.4 million on an adjusted basis) in the prior year quarter
Diluted EPS of $0.58 ($0.69 on an adjusted basis) compared to prior year quarter diluted EPS of $2.26 ($2.58 on an adjusted basis)

HOUSTON, July 26, 2023 /PRNewswire/ -- Stewart Information Services Corporation (NYSE: STC) today reported net income attributable to Stewart of $15.8 million ($0.58 per diluted share) for the second quarter 2023, compared to $61.7 million ($2.26 per diluted share) for the second quarter 2022. On an adjusted basis, Stewart's second quarter 2023 net income was $18.9 million ($0.69 per diluted share) compared to $70.4 million ($2.58 per diluted share) in the second quarter 2022. Second quarter 2023 pretax income before noncontrolling interests was $25.2 million ($29.3 million on an adjusted basis) compared to pretax income before noncontrolling interests of $86.8 million ($98.2 million on an adjusted basis) for the second quarter 2022.

Second quarter 2023 results included $1.1 million of pretax net realized and unrealized losses, primarily composed of a contingent receivable loss adjustment resulting from a previous disposition of a business, partially offset by net unrealized gains on fair value changes of equity securities investments. Second quarter 2022 results included $11.9 million of pretax net realized and unrealized losses, primarily related to net unrealized losses on fair value changes of equity securities investments.

"Our second quarter results improved compared to the first quarter as we moved into the seasonally stronger summer selling season. The elevated interest rate environment continued throughout the second quarter as mortgage interest rates reached almost seven percent, keeping transaction volumes from increasing as in a normal market," commented Fred Eppinger, chief executive officer. "Our long-term strategies of creating a stronger and more resilient company remain our primary focus, and I am pleased with our progress on these important initiatives. We continue to balance cost discipline with investments in managing our operations in this challenging environment."

Selected Financial Information
Summary results of operations are as follows (dollars in millions, except per share amounts, and amounts may not add as presented due to rounding):

Quarter Ended

June 30,

ARIVA.DE Börsen-Geflüster

Kurse

Stewart Information Services

58,50 €

0,00%

Stewart Information Services Realtime-Chart

Six Months Ended

June 30,

2023

2022

2023

2022

Total revenues

549.2

844.1

1,073.5

1,697.0

Pretax income before noncontrolling interests

25.2

86.8

15.0

166.4

Income tax expense

(5.4)

(19.9)

(0.5)

(37.6)

Net income attributable to noncontrolling interests

(4.0)

(5.2)

(6.9)

(9.2)

Net income attributable to Stewart

15.8

61.7

7.6

119.6

Non-GAAP adjustments, after taxes*

3.1

8.7

4.5

6.7

Adjusted net income attributable to Stewart*

18.9

70.4

12.1

126.2

Net income per diluted Stewart share

0.58

2.26

0.28

4.37

Adjusted net income per diluted Stewart share*

0.69

2.58

0.44

4.61

* Adjusted net income and adjusted net income per diluted share are non-GAAP measures. See Appendix A for explanation
and reconciliation of non-GAAP adjustments.

Title Segment
Summary results of the title segment are as follows (dollars in millions, except pretax margin):

	Quarter Ended June 30,
	2023	2022	% Change
Operating revenues	466.7	761.1	(39 %)
Investment income	12.1	6.7	80 %
Net realized and unrealized gains (losses)	2.0	(8.8)	(123 %)
Pretax income	35.5	93.6	(62 %)
Non-GAAP adjustments to pretax income	1.7	11.5
Adjusted pretax income*	37.2	105.1	(65 %)
Pretax margin	7.4 %	12.3 %
Adjusted pretax margin*	7.8 %	13.7 %

* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments.

Title segment operating revenues for the second quarter 2023 decreased $294.3 million, or 39 percent, compared to the second quarter 2022, as a result of transaction volume declines in our direct and agency title businesses, while total segment operating expenses decreased $220.1 million, or 33 percent, primarily driven by lower revenues. Agency retention expenses in the second quarter 2023 decreased $168.1 million, or 49 percent, in line with $201.2 million, or 49 percent, lower gross agency revenues, while the average independent agency remittance rate in the second quarter 2023 slightly improved to 17.7 percent compared to 17.1 percent in the prior year quarter.

Total employee costs and other operating expenses in the second quarter 2023 decreased $47.2 million, or 16 percent, compared to the prior year quarter. As a percentage of operating revenues, these expenses were 52.4 percent in the second quarter 2023 compared to 38.3 percent in the second quarter 2022, primarily due to lower second quarter 2023 revenues. Title loss expense decreased $6.6 million, or 25 percent, in the second quarter 2023 compared to the prior year quarter primarily as a result of lower title revenues. As a percentage of title revenues, title loss expense was 4.2 percent in the second quarter 2023 compared to 3.5 percent in the second quarter 2022, which benefited from last year's favorable claims experience.

The title segment's net realized and unrealized gains in the second quarter 2023 were primarily driven by $2.0 million of unrealized gains from fair value changes of equity securities investments, while the segment's net realized and unrealized losses in the prior year quarter were primarily due to $9.9 million of net unrealized losses on fair value changes of equity securities investments, partially offset by a $1.0 million gain related to an acquisition contingent liability adjustment. Investment income in the second quarter 2023 increased $5.4 million compared to the second quarter 2022, primarily due to higher interest income resulting from increased interest rates and higher short-term investment balances in the second quarter 2023. Non-GAAP adjustments to pretax income primarily included net realized and unrealized gains and losses, and $3.3 million and $2.5 million of acquisition intangible asset amortization and other expenses in the second quarters 2023 and 2022, respectively.

Direct title revenues information is presented below (dollars in millions):

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