Citing growth in its data and analytics division and a shifting business plan, CoreLogic (CLGX) reported an increase in revenue from $349.4 million in the second quarter to $367.5 million in the third quarter.
CoreLogic’s 3Q14 revenue totals were also up 3% over last year’s total in the same quarter.
The company reported that revenue from its data and analytics operations increased 23% year-over-year, to $173.6 million. The increase was driven by growth in insurance, spatial solutions, international and core property information revenues, which more than offset the impact of lower mortgage volumes, unfavorable foreign currency translation and the exit of certain non-core product lines, the company said.
CoreLogic’s technology and processing solutions revenue fell 10% year-over-year to $196.3 million, due to “the impact of contracting mortgage volumes (mortgage applications down approximately 30%), lower project-related document processing and retrieval revenues and the planned wind-down of a non-core credit reporting service more than offset the benefit of market share gains including acquisition-related revenues.”
The company also reported a 90% increase in its operating income from the second quarter to the third quarter, rising to $77.8 million. That total is also up 27% from the previous year.
“CoreLogic delivered excellent results in the third quarter. Revenue, operating and net income were up as we continued to expand our D&A footprint and reap the benefits of our market leadership in TPS,” said Anand Nallathambi, president and chief executive officer of CoreLogic.
“Our strong operating performance over the past several quarters, despite the ongoing reset in the U.S. mortgage industry, is a testimony to our relentless focus on our strategic transformation plan which has resulted in the expanded market leadership of our data-enabled business units."
Nallathambi also said that as the company moves forward, it will continue to focus on “aggressively growing our unique data assets, analytics and services through innovation, technology and operational excellence and deeper client intimacy.”
Of note in the earnings report is CoreLogic’s total debt, which sits at approximately $1.4 billion as of Sept. 30. That’s up $571.8 million from CoreLogic’s total debt as of Dec. 31, 2013.
“The increase in outstanding debt was primarily the result of the completion of the acquisition of Marshall & Swift/Boeckh and DataQuick Information Systems on March 25, 2014,” the company said. “As of Sept. 30, 2014, the Company had available capacity on its revolving credit facility under the Credit Agreement of $405.0 million.”
In the previous two quarters of 2014, CoreLogic has cited the contracting mortgage market as a drain on its earnings. In the first quarter, CoreLogic cited an estimated 60% “contraction” in U.S. mortgage origination volumes as a driver in its lower revenue, which was down 6% from last year’s first quarter to $310.4 million from $331.4 million.
In the second quarter, the company’s revenue increased to $349.4 million, which was also up 0.4% from 2Q13. The company said that the increase was “despite an estimated 50% contraction in U.S. mortgage volumes.”
In its second-quarter earnings report, CoreLogic slashed its estimate for 2014’s mortgage originations by 10% to approximately $1 trillion.
There’s no mention of CoreLogic’s origination forecast in its third-quarter earnings statement, but the company did increase its revenue projections for the year.
“Based on current business conditions and trends, available market estimates of fourth quarter of U.S. mortgage origination volumes and the forecast contributions of the retained AMPS business units mentioned above, the Company has updated its 2014 guidance ranges as follows: revenues, adjusted EBITDA and adjusted EPS of $1.39 to $1.41 billion, $350 to $360 million and $1.27 to $1.35 per share, respectively,” CoreLogic said.
“We continue to shift our business mix toward data-driven, subscription based models built around scaled market leading solutions and services,” added Frank Martell, chief operating and financial officer of CoreLogic.
“As a result of this strategy, our core mortgage operations clearly outperformed market volumes and we materially expanded and diversified our D&A revenues in the third quarter. The durability of our business model allows us to continue to invest in product and service innovation and operational improvements and, at the same time, return significant amounts of capital to our shareholders and reduce our debt balances.”
