NEW YORK (Reuters) - Fidelity National Financial Inc (FNF.N), which controls one of the largest U.S. title insurers, on Wednesday posted a surprise third-quarter loss and cut its dividend in half, as the nation’s housing slump drove down home sales and refinancings.
The Jacksonville, Florida-based company said it instituted an across-the-board 10 percent pay cut, and expects to keep pay at the lowered level through March.
Fidelity National also cut 1,000 jobs last quarter, on top of 1,600 job eliminations in the April-to-June period, and shut more than 115 title and escrow offices in the third quarter.
Chief Executive William Foley blamed a “significant slowdown” in title operations for the decision to cut the quarterly dividend to 15 cents per share from 30 cents.
The company’s third-quarter net loss was $198.3 million, or 95 cents per share, and reflected a $261.6 million charge to strengthen loss reserves. That loss compared with a profit of $6.5 million, or 3 cents per share, a year earlier. Revenue fell 27 percent to $989.7 million.
Analysts on average expected a profit of 3 cents per share on revenue of $1.09 billion, according to Reuters Estimates.
Title insurance guarantees that a property owner has title to a property and can legally transfer that title. The nation’s housing slump has resulted in lower demand for and lower prices on homes, cutting into title insurers’ revenue.
Fidelity National said title orders that closed fell 23 percent in the quarter to 260,600, while the number opened fell 22 percent to 407,400. Title and escrow premiums and fees dropped 25 percent to $900.9 million.
Shares of Fidelity National closed Wednesday down 70 cents to $9.02 on the New York Stock Exchange. They have fallen 38 percent this year. The company released results after U.S. markets closed.
Editing by Carol Bishopric