UPDATE 2-LandAmerica posts quarterly loss; cuts 325 jobs

(Recasts, adds details, analyst comments)

By Supantha Mukherjee BANGALORE, April 29 (Reuters) - LandAmerica Financial Group (LFG.N: Quote, Profile, Research, Stock Buzz), a large U.S. title insurer, reported a wider-than-expected quarterly loss, hurt by lower residential mortgage originations and a fall in commercial revenue.

LandAmerica has also reduced about 325 jobs during the latest first quarter, a company spokesman said.

The company said it will continue to reduce costs in its operating structure to provide a strong foundation for growth when the markets normalize. For the latest first quarter, total expenses were lowered by 23 percent to $726.4 million.

"They are partly a victim of general macro environment and the question would be to what extent can they further cut costs to stay in line with the revenue decline," Michael Taiano, analyst at Sandler O'Neill & Partners, said from New York.

Taiano has a "hold" rating on the stock.

"Tight mortgage lending conditions from reduced liquidity in the mortgage-backed securities market were factors in keeping transactional demand at bay," LandAmerica CEO Theodore Chandler said in a statement.

"These conditions, coupled with a reduction in commercial business and some increased severity in claims, compressed margins during first quarter 2008," Chandler said.

Sequentially, mortgage originations have got a little better in the first quarter but it has not reached the inflection point, and until that happens it's hard to generate margin expansion and grow revenue, analyst Taiano said.