Merger Costs Lead to Lower Earnings at LPS

Lender Processing Services Inc. reports earnings of $36 million in 3Q13, as a $13 million pretax charge helps to reduce results by 38% from $58 million one year prior. This charge is due to severance costs and merger-related costs from its pending acquisition by Fidelity National Financial.

LPS revenue is down 16% as there is less need for the companys default services offerings, as there are fewer foreclosures. Its revenue is $420 million, compared with $500 million in 3Q12.

Default services revenue is down 26% to $115 million. LPS did not renew some default services contracts as it looks to align risks and returns in this segment.

Origination services revenue is down 22% to $120 million, because lower loan volume resulted in less business for the title, escrow and appraisal units.

The technology segments revenue is down 3% to $180 million. An increase in the number of loans using its servicing platform resulted in a 2% year-over-year increase in revenue. Lower origination volume is the cause of the 8% decline in revenue from its Loan Quality Gateway platform.