Stewart Reports Second Quarter 2024 Results
Stewart Information Services (NYSE: STC) reported Q2 2024 results with total revenues of $602.2 million, up from $549.2 million in Q2 2023. Net income increased to $17.3 million ($0.62 per diluted share) compared to $15.8 million ($0.58 per diluted share) in the prior year quarter. On an adjusted basis, net income was $25.4 million ($0.91 per diluted share).
The title segment saw a 6% increase in operating revenues, driven by growth in domestic commercial, international, and agency title operations. The real estate solutions segment experienced a 29% increase in operating revenues, primarily due to increased credit information and valuation services.
Despite the improved results, CEO Fred Eppinger noted that the company remains impacted by a difficult housing market. Stewart continues to focus on strategic goals and invest in growth and margin improvement across all business lines.
Stewart Information Services (NYSE: STC) ha riportato i risultati del Q2 2024 con ricavi totali di 602,2 milioni di dollari, in aumento rispetto ai 549,2 milioni di dollari del Q2 2023. L'utile netto è aumentato a 17,3 milioni di dollari (0,62 dollari per azione diluita) rispetto ai 15,8 milioni di dollari (0,58 dollari per azione diluita) del trimestre dell'anno precedente. Su base rettificata, l'utile netto è stato di 25,4 milioni di dollari (0,91 dollari per azione diluita).
Il settore titoli ha registrato un aumento del 6% dei ricavi operativi, sostenuto dalla crescita nel settore commerciale domestico, nelle operazioni internazionali e agenziali. Il settore delle soluzioni immobiliari ha visto un incremento del 29% nei ricavi operativi, principalmente grazie all'aumento dei servizi di informazione creditizia e valutazioni.
Nonostante i risultati migliorati, il CEO Fred Eppinger ha sottolineato che l'azienda continua a subire gli effetti di un mercato immobiliare difficile. Stewart continua a concentrarsi sugli obiettivi strategici e a investire nella crescita e nel miglioramento dei margini in tutte le linee di business.
Stewart Information Services (NYSE: STC) reportó los resultados del Q2 2024 con ingresos totales de 602.2 millones de dólares, un aumento desde los 549.2 millones de dólares en el Q2 2023. El ingreso neto aumentó a 17.3 millones de dólares (0.62 dólares por acción diluida) en comparación con los 15.8 millones de dólares (0.58 dólares por acción diluida) en el trimestre del año anterior. En términos ajustados, el ingreso neto fue de 25.4 millones de dólares (0.91 dólares por acción diluida).
El segmento de títulos vio un aumento del 6% en los ingresos operativos, impulsado por el crecimiento en las operaciones comerciales nacionales, internacionales y de agencia. El segmento de soluciones inmobiliarias experimentó un aumento del 29% en los ingresos operativos, principalmente debido al aumento en los servicios de información crediticia y evaluación.
A pesar de los resultados mejorados, el CEO Fred Eppinger señaló que la empresa sigue viéndose afectada por un difícil mercado de la vivienda. Stewart sigue enfocándose en objetivos estratégicos e invirtiendo en crecimiento y mejoras en los márgenes en todas las líneas de negocio.
스튜어트 정보 서비스 (NYSE: STC)는 2024년 2분기 결과를 보고했으며, 총 수익은 6억 2백만 달러로, 2023년 2분기의 5억 4천 9백 20만 달러에서 증가했습니다. 당기순이익은 1,730만 달러 (희석주당 0.62달러)로 증가했으며, 이는 전년 동기 1,580만 달러 (희석주당 0.58달러)와 비교됩니다. 조정 기준으로 당기순이익은 2,540만 달러 (희석주당 0.91달러)였습니다.
타이틀 부문은 국내 상업, 국제 및 대리점 타이틀 운영에서 성장으로 인해 운영 수익이 6% 증가했습니다. 부동산 솔루션 부문은 신용 정보 및 평가 서비스 증가로 인해 운영 수익이 29% 증가했습니다.
개선된 결과에도 불구하고, CEO 프레드 에핑거는 회사가 어려운 주택 시장의 영향을 받고 있다고 언급했습니다. 스튜어트는 계속해서 전략적 목표에 집중하고 모든 사업 부문에서 성장 및 마진 개선에 투자하고 있습니다.
Stewart Information Services (NYSE: STC) a annoncé les résultats du deuxième trimestre 2024 avec des revenus totaux de 602,2 millions de dollars, en hausse par rapport à 549,2 millions de dollars au deuxième trimestre 2023. Le revenu net a augmenté à 17,3 millions de dollars (0,62 dollar par action diluée) contre 15,8 millions de dollars (0,58 dollar par action diluée) au cours du même trimestre de l'année précédente. Sur une base ajustée, le revenu net s'élevait à 25,4 millions de dollars (0,91 dollar par action diluée).
Le secteur des titres a connu une augmentation de 6 % des revenus d'exploitation, soutenue par la croissance dans le secteur commercial national, les opérations internationales et les titres d'agence. Le secteur des solutions immobilières a connu une augmentation de 29 % des revenus d'exploitation, principalement en raison de l'augmentation des services d'information de crédit et d'évaluation.
Malgré les résultats améliorés, le PDG Fred Eppinger a souligné que l'entreprise reste impactée par un marché du logement difficile. Stewart continue de se concentrer sur des objectifs stratégiques et d'investir dans la croissance et l'amélioration des marges dans toutes les lignes d'activité.
Stewart Information Services (NYSE: STC) berichtete über die Ergebnisse des Q2 2024 mit Gesamtumsätzen von 602,2 Millionen US-Dollar, ein Anstieg von 549,2 Millionen US-Dollar im Q2 2023. Der Nettoertrag stieg auf 17,3 Millionen US-Dollar (0,62 US-Dollar pro verwässerter Aktie) im Vergleich zu 15,8 Millionen US-Dollar (0,58 US-Dollar pro verwässerter Aktie) im Vorjahresquartal. Auf bereinigter Basis betrug der Nettoertrag 25,4 Millionen US-Dollar (0,91 US-Dollar pro verwässerter Aktie).
Der Titelbereich verzeichnete einen Anstieg der Betriebseinnahmen um 6 %, unterstützt durch Wachstum im nationalen Gewerbe, internationalen und Agenturtitelgeschäften. Der Bereich Immobilienlösungen erlebte einen Anstieg der Betriebseinnahmen um 29 %, hauptsächlich aufgrund eines Anstiegs bei Kreditinformationen und Bewertungsdienstleistungen.
Trotz der verbesserten Ergebnisse stellte CEO Fred Eppinger fest, dass das Unternehmen weiterhin von einem schwierigen Wohnungsmarkt betroffen ist. Stewart konzentriert sich weiterhin auf strategische Ziele und investiert in Wachstum und Margenverbesserungen in allen Geschäftsbereichen.
- Total revenues increased by 9.6% year-over-year to $602.2 million
- Net income rose by 9.5% to $17.3 million compared to Q2 2023
- Title segment operating revenues improved by 6% to $496.2 million
- Real estate solutions segment operating revenues grew by 29% to $92.2 million
- Domestic commercial revenues increased by 23% to $51.0 million
- Average domestic commercial fee per file improved 17% to $13,500
- Adjusted net income per diluted share decreased from $0.94 to $0.91 year-over-year
- Title segment pretax margin declined from 7.4% to 6.5%
- Non-commercial domestic revenues decreased by 8% to $169.4 million
- Average residential fee per file decreased by 7% to $3,000
- Consolidated other operating expenses increased by 18% year-over-year
- Net cash provided by operations decreased from $35.1 million to $21.1 million
Insights
Stewart Information Services 's Q2 2024 results show a mixed performance with some positive trends and ongoing challenges. Total revenues increased by
Key financial highlights include:
- Net income increased by
9.5% to$17.3 million - Diluted EPS rose to
$0.62 from$0.58 - Adjusted net income slightly decreased to
$25.4 million from$25.8 million - Pretax margin improved to
4.8% from4.6%
The title segment, which is the company's core business, showed mixed results. While operating revenues increased by
The real estate solutions segment demonstrated strong growth, with operating revenues up
Overall, Stewart's performance reflects its ability to navigate a challenging environment, but investors should monitor the company's ability to maintain profitability in the face of ongoing market pressures.
Stewart's Q2 results provide valuable insights into the current state of the real estate market. The company's performance reflects broader industry trends, particularly in the housing sector.
Key observations:
- Domestic non-commercial revenues decreased by
8% , indicating continued softness in the residential market. This aligns with the reported9% decrease in total residential purchase and refinancing transactions. - The average residential fee per file dropped from
$3,300 to$3,000 , suggesting downward pressure on home prices or a shift in transaction mix. - Conversely, domestic commercial revenues surged by
23% , with the average fee per file increasing from$11,600 to$13,500 . This points to strength in the commercial real estate sector, possibly driven by post-pandemic recovery and repositioning. - International operations showed growth in both non-commercial (
8% ) and commercial (15% ) segments, indicating potential opportunities in overseas markets.
The divergence between residential and commercial performance suggests a bifurcated real estate market. While higher interest rates continue to impact residential transactions, the commercial sector appears more resilient, possibly benefiting from economic recovery and changing business needs.
Investors should note that despite challenges in the residential market, Stewart's diversification into real estate solutions and strong commercial performance are helping to offset these headwinds. However, the overall housing market remains a key risk factor for the company's near-term performance.
- Total revenues of
$602.2 million $602.7 million $549.2 million $550.3 million - Net income of
$17.3 million $25.4 million $15.8 million $25.8 million - Diluted earnings per share of
$0.62 $0.91 $0.58 $0.94
Second quarter 2024 results included
"Our second quarter revenues increased when compared to the second quarter of last year, driven by solid topline results in several of our core businesses. As with the rest of the industry, we remain impacted by a continued difficult housing market," commented Fred Eppinger, chief executive officer. "We remain focused on achieving our strategic goals and continue to invest in ourselves as we pursue growth and margin improvement across all lines of business."
Selected Financial Information
Summary results of operations are as follows (dollars in millions, except per share amounts, pretax margin and adjusted pretax margin, and amounts may not add as presented due to rounding):
Quarter Ended June 30, | Six Months Ended June 30, | ||||
2024 | 2023 | 2024 | 2023 | ||
Total revenues | 602.2 | 549.2 | 1,156.5 | 1,073.5 | |
Pretax income before noncontrolling interests | 29.0 | 25.2 | 36.2 | 15.0 | |
Income tax expense | (7.9) | (5.4) | (8.9) | (0.5) | |
Net income attributable to noncontrolling interests | (3.7) | (4.0) | (6.8) | (6.9) | |
Net income attributable to Stewart | 17.3 | 15.8 | 20.5 | 7.6 | |
Non-GAAP adjustments, after taxes* | 8.1 | 10.0 | 9.6 | 17.9 | |
Adjusted net income attributable to Stewart* | 25.4 | 25.8 | 30.0 | 25.5 | |
Pretax margin | 4.8 % | 4.6 % | 3.1 % | 1.4 % | |
Adjusted pretax margin* | 6.6 % | 7.0 % | 4.2 % | 3.6 % | |
Net income per diluted Stewart share | 0.62 | 0.58 | 0.73 | 0.28 | |
Adjusted net income per diluted Stewart share* | 0.91 | 0.94 | 1.07 | 0.93 | |
* Adjusted net income, adjusted pretax margin and adjusted net income per diluted share are non-GAAP measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments. |
Title Segment
Summary results of the title segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):
Quarter Ended June 30, | ||||||
2024 | 2023 | % Change | ||||
Operating revenues | 496.2 | 466.7 | 6 % | |||
Investment income | 14.3 | 12.1 | 18 % | |||
Net realized and unrealized (losses) gains | (0.5) | 2.0 | (125 %) | |||
Pretax income | 33.4 | 35.5 | (6 %) | |||
Non-GAAP adjustments to pretax income* | 5.0 | 2.3 | ||||
Adjusted pretax income* | 38.4 | 37.7 | 2 % | |||
Pretax margin | 6.5 % | 7.4 % | ||||
Adjusted pretax margin* | 7.5 % | 7.9 % | ||||
* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments. | ||||||
Title segment operating revenues improved
Total title segment employee costs and other operating expenses slightly increased by
Investment income improved by
Direct title revenues information is presented below (dollars in millions):
Quarter Ended June 30, | ||||
2024 | 2023 | % Change | ||
Non-commercial: | ||||
Domestic | 169.4 | 184.5 | (8 %) | |
International | 28.1 | 25.9 | 8 % | |
197.5 | 210.4 | (6 %) | ||
Commercial: | ||||
Domestic | 51.0 | 41.5 | 23 % | |
International | 7.0 | 6.1 | 15 % | |
58.0 | 47.6 | 22 % | ||
Total direct title revenues | 255.5 | 258.0 | (1 %) | |
Second quarter 2024 total non-commercial domestic revenues decreased
Real Estate Solutions Segment
Summary results of the real estate solutions segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):
Quarter Ended June 30, | ||||
2024 | 2023 | % Change | ||
Operating revenues | 92.2 | 71.4 | 29 % | |
Pretax income | 5.1 | 3.3 | 56 % | |
Non-GAAP adjustments to pretax income* | 5.5 | 7.1 | ||
Adjusted pretax income* | 10.6 | 10.3 | 3 % | |
Pretax margin | 5.5 % | 4.6 % | ||
Adjusted pretax margin* | 11.5 % | 14.5 % | ||
* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for an explanation and reconciliation of non-GAAP adjustments. | ||||
Segment operating revenues increased
Corporate and Other Segment
The segment's results were primarily driven by net expenses attributable to corporate operations, which decreased to
Expenses
Consolidated employee costs in the second quarter 2024 decreased
Consolidated other operating expenses in the second quarter 2024 increased
Other
Net cash provided by operations in the second quarter 2024 was
Second Quarter Earnings Call
Stewart will hold a conference call to discuss the second quarter 2024 earnings at 8:30 a.m. Eastern Time on Thursday, July 25, 2024. To participate, dial (800) 274-8461 (
About Stewart
Stewart (NYSE-STC) is a global real estate services company, offering products and services through our direct operations, network of Stewart Trusted Providers™ and family of companies. From residential and commercial title insurance and closing and settlement services to specialized offerings for the mortgage and real estate industries, we offer the comprehensive service, deep expertise and solutions our customers need for any real estate transaction. At Stewart, we are dedicated to becoming the premier title services company and we are committed to doing so by partnering with our customers to create mutual success. Learn more at stewart.com.
Cautionary statement regarding forward-looking statements. Certain statements in this earnings release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance. These statements often contain words such as "may," "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "foresee" or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things, the volatility of economic conditions; adverse changes in the level of real estate activity; changes in mortgage interest rates, existing and new home sales, and availability of mortgage financing; our ability to respond to and implement technology changes, including the completion of the implementation of our enterprise systems; the impact of unanticipated title losses or the need to strengthen our policy loss reserves; any effect of title losses on our cash flows and financial condition; the ability to attract and retain highly productive sales associates; the impact of vetting our agency operations for quality and profitability; independent agency remittance rates; changes to the participants in the secondary mortgage market and the rate of refinancing that affects the demand for title insurance products; regulatory non-compliance, fraud or defalcations by our title insurance agencies or employees; our ability to timely and cost-effectively respond to significant industry changes and introduce new products and services; the outcome of pending litigation; our ability to manage risks associated with potential cybersecurity or other privacy or data security breaches; the impact of changes in governmental and insurance regulations, including any future reductions in the pricing of title insurance products and services; our dependence on our operating subsidiaries as a source of cash flow; our ability to access the equity and debt financing markets when and if needed; our ability to grow our international operations; seasonality and weather; and our ability to respond to the actions of our competitors. These risks and uncertainties, as well as others, are discussed in more detail in our documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023, and if applicable, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed subsequently. All forward-looking statements included in this earnings release are expressly qualified in their entirety by such cautionary statements. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this earnings release to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.
ST-IR
STEWART INFORMATION SERVICES CORPORATION CONDENSED STATEMENTS OF INCOME (In thousands of dollars, except per share amounts and except where noted) | |||||
Quarter Ended June 30, | Six Months Ended June 30, | ||||
2024 | 2023 | 2024 | 2023 | ||
Revenues: | |||||
Title revenues: | |||||
Direct operations | 255,480 | 257,994 | 466,068 | 465,864 | |
Agency operations | 240,760 | 208,755 | 481,532 | 457,775 | |
Real estate solutions and other | 92,198 | 71,387 | 175,214 | 133,978 | |
Total operating revenues | 588,438 | 538,136 | 1,122,814 | 1,057,617 | |
Investment income | 14,306 | 12,123 | 27,207 | 18,722 | |
Net realized and unrealized (losses) gains | (514) | (1,105) | 6,524 | (2,883) | |
602,230 | 549,154 | 1,156,545 | 1,073,456 | ||
Expenses: | |||||
Amounts retained by agencies | 200,126 | 171,776 | 400,102 | 377,514 | |
Employee costs | 179,708 | 182,666 | 352,125 | 353,217 | |
Other operating expenses | 152,291 | 129,333 | 289,244 | 250,073 | |
Title losses and related claims | 21,090 | 19,802 | 38,472 | 37,476 | |
Depreciation and amortization | 15,198 | 15,528 | 30,582 | 30,434 | |
Interest | 4,812 | 4,875 | 9,869 | 9,724 | |
573,225 | 523,980 | 1,120,394 | 1,058,438 | ||
Income before taxes and noncontrolling interests | 29,005 | 25,174 | 36,151 | 15,018 | |
Income tax expense | (7,940) | (5,392) | (8,876) | (454) | |
Net income | 21,065 | 19,782 | 27,275 | 14,564 | |
Less net income attributable to noncontrolling interests | 3,722 | 3,967 | 6,802 | 6,939 | |
Net income attributable to Stewart | 17,343 | 15,815 | 20,473 | 7,625 | |
Net earnings per diluted share attributable to Stewart | 0.62 | 0.58 | 0.73 | 0.28 | |
Diluted average shares outstanding (000) | 28,013 | 27,444 | 28,011 | 27,402 | |
Selected financial information: | |||||
Net cash provided (used) by operations | 21,123 | 35,107 | (8,465) | (15,995) | |
Other comprehensive (loss) income | (752) | (1,290) | (7,348) | 6,017 | |
Second Quarter Domestic Order Counts: | ||||||||||||
Opened Orders 2024: | Apr | May | June | Total | Closed Orders 2024: | Apr | May | June | Total | |||
Commercial | 1,232 | 1,249 | 1,045 | 3,526 | Commercial | 1,288 | 1,314 | 1,185 | 3,787 | |||
Purchase | 19,273 | 18,493 | 17,291 | 55,057 | Purchase | 12,247 | 13,610 | 11,975 | 37,832 | |||
Refinancing | 5,782 | 5,976 | 4,973 | 16,731 | Refinancing | 3,530 | 3,547 | 2,901 | 9,978 | |||
Other | 3,664 | 4,810 | 2,933 | 11,407 | Other | 3,272 | 2,526 | 2,104 | 7,902 | |||
Total | 29,951 | 30,528 | 26,242 | 86,721 | Total | 20,337 | 20,997 | 18,165 | 59,499 | |||
Opened Orders 2023: | Apr | May | June | Total | Closed Orders 2023: | Apr | May | June | Total | |||
Commercial | 1,034 | 1,071 | 1,189 | 3,294 | Commercial | 1,069 | 1,212 | 1,304 | 3,585 | |||
Purchase | 17,457 | 20,956 | 19,030 | 57,443 | Purchase | 12,312 | 15,013 | 14,901 | 42,226 | |||
Refinancing | 5,365 | 6,102 | 5,393 | 16,860 | Refinancing | 3,298 | 3,587 | 3,698 | 10,583 | |||
Other | 3,536 | 2,129 | 1,923 | 7,588 | Other | 1,066 | 1,131 | 1,658 | 3,855 | |||
Total | 27,392 | 30,258 | 27,535 | 85,185 | Total | 17,745 | 20,943 | 21,561 | 60,249 | |||
STEWART INFORMATION SERVICES CORPORATION CONDENSED BALANCE SHEETS (In thousands of dollars) | ||
June 30, 2024 |
December 31, | |
Assets: | ||
Cash and cash equivalents | 133,405 | 233,365 |
Short-term investments | 43,341 | 39,023 |
Investments in debt and equity securities, at fair value | 660,933 | 679,936 |
Receivables – premiums from agencies | 39,974 | 38,676 |
Receivables – other | 117,593 | 93,811 |
Allowance for uncollectible amounts | (8,186) | (7,583) |
Property and equipment, net | 86,729 | 82,335 |
Operating lease assets, net | 108,653 | 115,879 |
Title plants | 73,378 | 73,359 |
Goodwill | 1,080,546 | 1,072,129 |
Intangible assets, net of amortization | 177,112 | 193,196 |
Deferred tax assets | 3,673 | 3,776 |
Other assets | 128,335 | 84,959 |
2,645,486 | 2,702,861 | |
Liabilities: | ||
Notes payable | 445,568 | 445,290 |
Accounts payable and accrued liabilities | 165,382 | 190,054 |
Operating lease liabilities | 127,307 | 135,654 |
Estimated title losses | 512,446 | 528,269 |
Deferred tax liabilities | 23,509 | 25,045 |
1,274,212 | 1,324,312 | |
Stockholders' equity: | ||
Common Stock and additional paid-in capital | 345,082 | 338,451 |
Retained earnings | 1,064,870 | 1,070,841 |
Accumulated other comprehensive loss | (42,563) | (35,215) |
Treasury stock | (2,666) | (2,666) |
Stockholders' equity attributable to Stewart | 1,364,723 | 1,371,411 |
Noncontrolling interests | 6,551 | 7,138 |
Total stockholders' equity | 1,371,274 | 1,378,549 |
2,645,486 | 2,702,861 | |
Number of shares outstanding (000) | 27,605 | 27,370 |
Book value per share | 49.44 | 50.11 |
STEWART INFORMATION SERVICES CORPORATION SEGMENT INFORMATION (In thousands of dollars)
| |||||||||
Quarter Ended: | June 30, 2024 | June 30, 2023 | |||||||
Title | Real | Corporate and | Total | Title | Real | Corporate and | Total | ||
Revenues: | |||||||||
Operating revenues | 496,240 | 92,198 | - | 588,438 | 466,749 | 71,387 | - | 538,136 | |
Investment income | 14,282 | 24 | - | 14,306 | 12,099 | 24 | - | 12,123 | |
Net realized and unrealized (losses) | (487) | - | (27) | (514) | 1,977 | - | (3,082) | (1,105) | |
510,035 | 92,222 | (27) | 602,230 | 480,825 | 71,411 | (3,082) | 549,154 | ||
Expenses: | |||||||||
Amounts retained by agencies | 200,126 | - | - | 200,126 | 171,776 | - | - | 171,776 | |
Employee costs | 162,916 | 13,583 | 3,209 | 179,708 | 165,585 | 12,538 | 4,543 | 182,666 | |
Other operating expenses | 83,616 | 67,252 | 1,423 | 152,291 | 78,960 | 49,311 | 1,061 | 129,332 | |
Title losses and related claims | 21,090 | - | - | 21,090 | 19,802 | - | - | 19,802 | |
Depreciation and amortization | 8,536 | 6,264 | 398 | 15,198 | 8,883 | 6,280 | 365 | 15,528 | |
Interest | 380 | 7 | 4,425 | 4,812 | 360 | - | 4,515 | 4,875 | |
476,664 | 87,106 | 9,455 | 573,225 | 445,366 | 68,129 | 10,484 | 523,979 | ||
Income (loss) before taxes | 33,371 | 5,116 | (9,482) | 29,005 | 35,459 | 3,282 | (13,566) | 25,175 | |
Six Months Ended: | June 30, 2024 | June 30, 2023 | |||||||
Title | Real | Corporate and | Total | Title | Real | Corporate and | Total | ||
Revenues: | |||||||||
Operating revenues | 947,600 | 175,214 | - | 1,122,814 | 923,639 | 133,978 | - | 1,057,617 | |
Investment income | 27,158 | 49 | - | 27,207 | 18,665 | 57 | - | 18,722 | |
Net realized and unrealized gains | 6,629 | - | (105) | 6,524 | 164 | - | (3,047) | (2,883) | |
981,387 | 175,263 | (105) | 1,156,545 | 942,468 | 134,035 | (3,047) | 1,073,456 | ||
Expenses: | |||||||||
Amounts retained by agencies | 400,102 | - | - | 400,102 | 377,514 | - | - | 377,514 | |
Employee costs | 319,718 | 25,801 | 6,606 | 352,125 | 319,862 | 24,971 | 8,384 | 353,217 | |
Other operating expenses | 161,516 | 125,070 | 2,658 | 289,244 | 155,127 | 91,835 | 3,112 | 250,074 | |
Title losses and related claims | 38,472 | - | - | 38,472 | 37,476 | - | - | 37,476 | |
Depreciation and amortization | 17,266 | 12,538 | 778 | 30,582 | 16,986 | 12,581 | 867 | 30,434 | |
Interest | 759 | 7 | 9,103 | 9,869 | 709 | - | 9,015 | 9,724 | |
937,833 | 163,416 | 19,145 | 1,120,394 | 907,674 | 129,387 | 21,378 | 1,058,439 | ||
Income (loss) before taxes | 43,554 | 11,847 | (19,250) | 36,151 | 34,794 | 4,648 | (24,425) | 15,017 | |
Appendix A
Non-GAAP Adjustments
Management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) to analyze its performance. These include: (1) adjusted revenues, which are reported revenues adjusted for net realized and unrealized gains and losses and (2) adjusted pretax income and adjusted net income, which are reported pretax income and reported net income after earnings from noncontrolling interests, respectively, adjusted for net realized and unrealized gains and losses, acquired intangible asset amortization, office closure costs, executive severance expenses, and nonrecurring expenses. Adjusted diluted earnings per share (adjusted diluted EPS) is calculated using adjusted net income divided by the diluted average weighted outstanding shares. Adjusted pretax margin is calculated using adjusted pretax income divided by adjusted total revenues. Management views these measures as important performance measures of core profitability for its operations and as key components of its internal financial reporting. Management believes investors benefit from having access to the same financial measures that management uses.
Below are reconciliations of the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the quarter and six months ended June 30, 2024 and 2023 (dollars in millions, except shares, per share amounts and pretax margins, and amounts may not add as presented due to rounding).
Quarter Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | % Chg | 2024 | 2023 | % Chg | ||
Total revenues | 602.2 | 549.2 | 10 % | 1,156.5 | 1,073.5 | 8 % | |
Non-GAAP revenue adjustments: | |||||||
Net realized and unrealized losses (gains) | 0.5 | 1.1 | (6.5) | 2.9 | |||
Adjusted total revenues | 602.7 | 550.3 | 10 % | 1,150.0 | 1,076.3 | 7 % | |
Pretax income | 29.0 | 25.2 | 15 % | 36.2 | 15.0 | 141 % | |
Non-GAAP pretax adjustments: | |||||||
Net realized and unrealized losses (gains) | 0.5 | 1.1 | (6.5) | 2.9 | |||
Acquired intangible asset amortization | 8.3 | 9.1 | 16.8 | 17.6 | |||
Office closure costs | 1.5 | - | 1.6 | - | |||
Executive severance expenses | 0.3 | 1.7 | 0.6 | 1.7 | |||
State sales tax assessment expense | - | 1.2 | - | 1.2 | |||
Adjusted pretax income | 39.6 | 38.3 | 3 % | 48.7 | 38.5 | 27 % | |
GAAP pretax margin | 4.8 % | 4.6 % | 3.1 % | 1.4 % | |||
Adjusted pretax margin | 6.6 % | 7.0 % | 4.2 % | 3.6 % | |||
Net income attributable to Stewart | 17.3 | 15.8 | 10 % | 20.5 | 7.6 | 169 % | |
Non-GAAP pretax adjustments: | |||||||
Net realized and unrealized losses (gains) | 0.5 | 1.1 | (6.5) | 2.9 | |||
Acquired intangible asset amortization | 8.3 | 9.1 | 16.8 | 17.6 | |||
Office closure costs | 1.5 | - | 1.6 | - | |||
Executive severance expenses | 0.3 | 1.7 | 0.6 | 1.7 | |||
State sales tax assessment expense | - | 1.2 | - | 1.2 | |||
Net tax effects of non-GAAP adjustments | (2.5) | (3.2) | (3.0) | (5.6) | |||
Non-GAAP adjustments, after taxes | 8.1 | 10.0 | 9.6 | 17.9 | |||
Adjusted net income attributable to Stewart | 25.4 | 25.8 | (2 %) | 30.0 | 25.5 | 18 % | |
Diluted average shares outstanding (000) | 28,013 | 27,444 | 28,011 | 27,402 | |||
GAAP net income per share | 0.62 | 0.58 | 0.73 | 0.28 | |||
Adjusted net income per share | 0.91 | 0.94 | 1.07 | 0.93 | |||
Quarter Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | % Chg | 2024 | 2023 | % Chg | ||
Title Segment:
| |||||||
Revenues | 510.0 | 480.8 | 6 % | 981.4 | 942.5 | 4 % | |
Net realized and unrealized losses (gains) | 0.5 | (2.0) | (6.6) | (0.2) | |||
Adjusted revenues | 510.5 | 478.8 | 7 % | 974.8 | 942.3 | 3 % | |
Pretax income | 33.4 | 35.5 | (6 %) | 43.6 | 34.8 | 25 % | |
Non-GAAP revenue adjustments: | |||||||
Net realized and unrealized losses (gains) | 0.5 | (2.0) | (6.6) | (0.2) | |||
Acquired intangible asset amortization | 2.8 | 3.3 | 5.7 | 6.0 | |||
Office closure costs | 1.5 | - | 1.6 | - | |||
Severance expenses | 0.3 | 1.0 | 0.6 | 1.0 | |||
Adjusted pretax income | 38.4 | 37.7 | 2 % | 44.9 | 41.6 | 8 % | |
GAAP pretax margin | 6.5 % | 7.4 % | 4.4 % | 3.7 % | |||
Adjusted pretax margin | 7.5 % | 7.9 % | 4.6 % | 4.4 % | |||
Real Estate Solutions Segment:
| |||||||
Revenues | 92.2 | 71.4 | 29 % | 175.3 | 134.0 | 31 % | |
Pretax income | 5.1 | 3.3 | 56 % | 11.8 | 4.6 | 155 % | |
Non-GAAP revenue adjustments: | |||||||
Acquired intangible asset amortization | 5.5 | 5.8 | 11.1 | 11.6 | |||
State sales tax assessment expense | - | 1.2 | - | 1.2 | |||
Adjusted pretax income | 10.6 | 10.3 | 3 % | 23.0 | 17.5 | 31 % | |
GAAP pretax margin | 5.5 % | 4.6 % | 6.8 % | 3.5 % | |||
Adjusted pretax margin | 11.5 % | 14.5 % | 13.1 % | 13.1 % |
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SOURCE Stewart Information Services Corporation
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