FAF Earnings Prediction
The chart below shows how FAF performed 10 days before and after its earnings report, based on data from the past quarters. Typically, FAF sees a -0.59% change in stock price 10 days leading up to the earnings, and a +0.68% change 10 days following the report. On the earnings day itself, the stock moves by +0.39%. This data can give you a slight idea of what to expect for the next quarter's release.
FAF Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
1.69B
17.64%
19.69%
Gross Margin
--
--
--
Operating Margin
--
--
--
Net Margin
4.33%
81.17%
-158.99%
EPS
0.69
109.09%
-169.00%
No Data Available
FAF Earnings Analysis
First American Financial Corp Corporation (FAF.N) Earnings Conference Call
Positive
Adjusted Pretax Margin Growth: Adjusted pretax title margin reached 11.8% in Q4 2024, reflecting strong operational efficiency and expense management.
Segment Revenue Growth: Title segment revenue increased by 22% year-over-year to $1.6 billion, driven by an 18% rise in purchase revenue and a 75% increase in refinance revenue.
Commercial Revenue Surge: Commercial revenue surged by 47% compared to the previous year, totaling $252 million, with closed orders up 4% and average revenue per order increasing by 39%.
Investment Income Surge: Investment income for the title segment was $155 million, exceeding expectations and up $23 million from the same quarter last year, attributed to a successful strategic portfolio rebalancing project.
Home Warranty Revenue Growth: Home Warranty segment revenue grew by 4% year-over-year, achieving an adjusted pretax margin of 18.2%, indicating solid performance in a challenging market.
Negative
Revenue Increase Amidst Distress: Despite a 22% increase in title segment revenue to $1.6 billion, the refinance revenue remains critically low, accounting for only 5% of direct revenue, indicating a distressed market with mortgage rates around 7%.
Home Warranty Margin Decline: The Home Warranty segment's adjusted pretax margin decreased to 18.2%, down from 19.9% the previous year, reflecting a decline in profitability despite a 4% revenue growth to $103 million.
Tax Rate Increase Impact: The effective tax rate increased to 27% due to a valuation reserve against deferred tax assets, resulting in a $0.03 per diluted share reduction compared to the normalized tax rate of 24%.
Policy Loss Provision Stability: The provision for policy losses and other claims remained unchanged at $38 million, representing 3% of title premiums and escrow fees, indicating persistent risk exposure without improvement in loss management.
Revenue Recognition Challenges: A $6 million change in estimates of earned premium revenue negatively impacted both revenue and pretax income, highlighting ongoing challenges in revenue recognition and forecasting accuracy.
FAF FAQs
How does FAF typically perform around its earnings report dates?
Is First American Financial Corp (FAF) Q4 2024 Earnings Call Summary positive or negative?
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FAF Earning Call Sentiment
Earnings call transcript: First American Q4 2024 beats forecasts, stock steady
FAF.N
0.78%Positive
The earnings call reveals strong financial performance with significant revenue growth in multiple segments, but this is tempered by uncertainties in market conditions, particularly in the residential sector. The Q&A indicates cautious optimism but highlights risks related to interest rates and economic conditions. The lack of a clear shareholder return plan and uncertainties in guidance balance out the positive financial metrics, leading to a neutral sentiment. Additionally, the absence of a market cap limits prediction accuracy.
