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, 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.
The insurer posted a loss of $24.2 million, or $1.60 a share, compared with earnings of $4.7 million, or 26 cents a share, last year.
Total revenue for the quarter fell 27.6 percent to $686.4 million.
Analysts on average had expected the company to post a loss of 49 cents a share, before special items, according to Reuters Estimates.
Amid lower earnings in other segments, the company reported pretax earnings of $10.1 million in its lender services segment, compared with a loss of $8.7 million, last year. (Editing by Gopakumar Warrier)
