Although Black Knight Financial Services Inc. became a separate public company last year, Fidelity National Financial Inc. still holds a majority stake in the mortgage technology company.
And even though Fidelity shareholders could see a nice profit if and when the company sells off its remaining Black Knight stock, Fidelity Chairman Bill Foley said last week it will be at least a year and probably longer before it does anything.
During Fidelity’s quarterly conference call, one analyst asked why the company is holding on to the Black Knight shares, which Foley said are worth $12 per Fidelity share (Fidelity has been trading in the mid-$30s recently)
Foley said the main reason involves guaranteed debt that has to be paid off if Fidelity sells the shares, which would cause “prohibiting” prepayment penalties if it is paid before October next year.
He also said Fidelity, which is mainly a title insurance company, is benefiting from its continuing business relationship with Black Knight.
“We are also interested in executing on our cross-sell plan, which really got underway earlier this year. We restructured the way that we attack the marketplace and really started utilizing some Black Knight personnel to help cross-sell our non-investment-related products,” he said.
“And we’re having quite a bit of success,” Foley said.
Fidelity reported third-quarter adjusted earnings of 69 cents a share, 9 cents higher than last year.
“Overall, we remain the most profitable company in the industry and we are confident that our title insurance business will have a solid finish to the year,” Foley said.
Black Knight earnings up
Black Knight reported adjusted earnings of 29 cents a share in the third quarter, 4 cents higher than last year.
Black Knight provides processing services for mortgage lenders and dominates its industry, with about two-thirds of all U.S. first mortgage loans processed through its systems.
The company is profiting by selling additional services to its clients, which include most of the top U.S. mortgage lenders, CEO Thomas Sanzone said in Black Knight’s conference call.
“There is a continuing trend towards originating home equity loans and first mortgages on a single platform,” he said.
“Similarly, as illustrated by the deals with clients such as JPMorgan Chase, PNC and Bank of America, servicers continue to consolidate first and second mortgages onto MSP (Black Knight’s mortgage servicing platform) to mitigate risk and gain a better view of their borrowers,” Sanzone said.
All ‘quiet’ at FNFV
Fidelity’s investment unit, Fidelity National Financial Ventures, reported a third-quarter adjusted net loss of a penny a share.
FNFV was formed by Fidelity as a tracking stock to represent its investments in non-title businesses and it makes its biggest noise by buying and selling or spinning off the various investments. However, Foley said it was a “quiet” third quarter for FNFV.
“We will continue to focus on the growth, financial performance and monetization of our current investments while seeking attractive future investments that will create value for our shareholders,” he said.
FIS ahead of schedule with SunGard integration
Fidelity National Information Services Inc., or FIS, reported adjusted third-quarter earnings of $1 a share, 10 cents higher than last year.
CEO Gary Norcross said in FIS’s conference call that the banking technology company’s integration of SunGard Data Services Inc. is ahead of schedule.
After acquiring SunGard in December, FIS expects $200 million in “run rate synergies” (cost cuts) from the merger this year, putting the company 12 months ahead of its original plan, he said.
Norcross expects annual cost savings from merging the SunGard operations will reach $250 million next year.
“We are on track to exceed our full-year 2016 goals and are well-positioned to achieve our longer-term growth objectives, which are to grow our base business, unlock enterprise value through strategic investments, expand our solution portfolio within our existing client base and remain focused on strong financial discipline,” he said.
FIS was spun off from Fidelity National Financial in 2006 and operates separately from Fidelity.
Analysts like Advanced Disposal
Nearly a month after its initial public offering, a large group of analysts initiated coverage on Advanced Disposal Services Inc. last week and the views are mostly positive.
Eight of the nine analysts rated the Ponte Vedra-based waste management services company at the equivalent of a “buy” and the other rated it as “neutral.”
The ratings came before Advanced Disposal issued its third-quarter earnings report last week. The company had a profit of $3.8 million, or 6 cents a share, reversing a loss in the third quarter of 2015.
The company said its results improved in part from a year-over-year reduction in losses related to fuel derivative contracts and its revenue growth benefited from higher-margin acquisitions.
Regency Centers occupancy high
Regency Centers Corp. reported core funds from operations of 81 cents a share for the third quarter, 5 cents higher than last year.
Funds from operations are basically earnings excluding depreciation and amortization expenses and are considered the key earnings metric for real estate investment trusts like Regency.
The Jacksonville-based shopping center developer said its portfolio of 307 properties was 95.6 percent leased at the end of the quarter.
“This was achieved in the face of recent bankruptcies and anchor move-outs, and shop leasing remains vibrant and move-outs low. Further, the anchor vacancies present our team with opportunities for upgrades over the prior tenants,” CEO Hap Stein said in Regency’s conference call.
Evercore ISI analyst Steve Sakwa raised his rating on Regency from “hold” to “buy” after the earnings report.
In his research note, Sakwa said bankruptcies of retailers including Sports Authority and Eastern Mountain will be a drag on earnings, but he expects Regency to outperform its peers.
“In addition, if there is an expectation for a slowdown in the economy over the next 12-18 months, the company’s disciplined approach to development, defensive grocery anchored portfolio and strong balance sheet are qualities that will help in weathering the disruptions in the capital markets,” he said.
Rayonier AM again beats forecasts
For the third straight quarter, Rayonier Advanced Materials Inc.’s earnings were significantly higher than analysts expected, as the company continues to recover from two years of disappointing results.
The Jacksonville-based producer of cellulose specialties products reported third-quarter earnings of 44 cents a share, below third-quarter 2015 earnings of 76 cents but higher than the average analysts’ forecast of 23 cents, according to Yahoo Finance.
In the company’s conference call, CEO Paul Boynton said Rayonier AM’s “transformation initiative” is resulting in lower costs and higher productivity.
“Additionally, in the quarter, we raised $173 million of cash through an equity offering, materially reducing leverage and positioning the company for accelerated investments and growth opportunities that will drive long term stockholder value,” he said.
Land sales help Rayonier earnings
Timber and real estate company Rayonier Inc. report adjusted earnings of 33 cents a share for the third quarter, nearly double the 17 cents earned in the third quarter of 2015.
Rayonier also said because of strong results so far this year, it increased its forecast for adjusted earnings before interest, taxes, depreciation and amortization for the full year to a range of $228 million to $235 million. It had previously projected $195 million to $215 million.
In the company’s conference call, CEO David Nunes said the strong third-quarter earnings were fueled by its real estate and New Zealand timber businesses.
Nunes said the real estate division was helped by a $48 million sale of timberland to the U.S. Navy Department, as part of an expansion of the Navy’s Townsend Bombing Range in Georgia.
Real estate sales also included a 73-acre tract in St. Johns County to homebuilder Toll Brothers for $1.4 million.
“As we’ve said in the past, we’ll continue to optimize our business plan and capital allocation priorities to deliver the best long-term value for our shareholders in light of prevailing market conditions,” Nunes said.
Rayonier Advanced Materials and Rayonier Inc. split into separate companies in mid-2014.
Web.com earnings rise above forecast
Web.com Group Inc. reported adjusted third-quarter earnings of 76 cents a share, 14 cents higher than last year and above its forecast range of 63 to 67 cents.
However, adjusted revenue of $192.8 million was lower than its forecast range of $193 million to $195 million.
Web.com provides website development services for small business. CEO David Brown said in the company’s conference call that revenue was impacted by weaker performance in the company’s domain aftermarket business.
TapImmune stock moving to Nasdaq
TapImmune Inc. said its stock has been approved for listing on the Nasdaq Capital Market, and the stock will begin trading there Tuesday under the ticker “TPIV.”
Jacksonville-based TapImmune, which is developing treatments for cancer, has been trading on the Over-the-Counter Bulletin Board. It sought a Nasdaq listing to gain more visibility for its stock.
Publix stock price drops
Publix Super Markets Inc. last week said its stock price dropped from $41.90 on Aug. 1 to $40.15 as of Nov. 1.
Publix’s stock is not publicly traded and is made available for sale only to employees, with its value determined by appraisals five times a year.
The Lakeland-based supermarket chain reported third-quarter earnings rose 2.1 percent to $412.3 million, or 55 cents a share.
Total sales rose 2.4 percent to $8 billion and comparable-store sales (sales at stores open for more than one year) rose 0.9 percent.
“Unfortunately, our results were not enough to offset the challenges in the stock market,” CEO Todd Jones said in a news release.
St. Joe earnings little changed
The St. Joe Co. reported third-quarter earnings of $2.71 million, or 4 cents a share, little change from the third-quarter 2015 earnings of $2.77 million, or 3 cents a share.
The real estate development company said, however, this year’s earnings were an improvement because third-quarter 2015 results were helped by a one-time gain of $5.3 million on the sale of investments.