Feb 19 (Reuters) - Fidelity National Financial Inc’s quarterly profit beat estimates as it earned more premium from its title insurance business.
Title insurance guarantees that property owners have title to property and can legally transfer that title. Many lenders require that buyers have the insurance before extending loans.
Low interest rates have prompted more Americans to buy homes again after the U.S. housing market fell into a deep rut five years ago due to the financial crisis.
Sales of new U.S. single-family homes rose last year to the highest level since 2009, a sign the troubled U.S. housing market has turned a corner.
Fidelity National’s revenue rose 75 percent to $2.23 billion while title premium for the quarter rose 28 percent to $1.12 billion.
Net profit fell to $151.8 million, or 66 cents per share, for the quarter ended Dec. 31, from $172.7 million, or 78 cents per share, a year earlier due to rise in operating expenses related to the company’s restaurant business.
Analysts on average had expected earnings of 60 cents per share on revenue of $2.17 billion, according to Thomson Reuters I/B/E/S.
The No. 1 U.S. property title insurer’s revenue for restaurant business, which owns O‘Charley‘s, Ninety Nine, Max and Erma’s and Village Inn, was $358.5 million.
Apart from its restaurant holdings, the company has a minority stake in electrical components maker Remy International Inc and human resources company Ceridian Corp.
Shares of the Jacksonville, Florida-based company, which has risen more than 45 percent in the last year, were up 4 percent after the bell. They closed at $25.59 on the New York Stock Exchange on Tuesday.