CoreLogic (CLGX) reported its first quarter earnings and the news wasn’t great. The company’s revenue was down 6% from last year’s first quarter to $310.4 million. CoreLogic’s revenue in 1Q13 was $331.4 million.
On the bright side, analysts expected net income of $0.16 a share. Diluted EPS instead came in at $0.17.
And its revenue of $310.4 million beat estimates of $287.01 million.
CoreLogic cited an estimated 60% “contraction” in U.S. mortgage origination volumes as a driver in its lower revenue. The company did note that market share gains in Technology and Processing Solutions and growth in insurance and spatial solutions and international operations helped to offset the drop.
The company’s operating income from continuing operations was down significantly from last year. It decreased 71% to $13.7 million reflecting the impact of lower mortgage origination volumes as well as acquisition-related costs, severance charges and stranded AMPS costs.
The net loss from continuing operations was $3.9 million.
“CoreLogic continued to execute against its strategic plan in the first quarter despite stiff headwinds in mortgage,” said Anand Nallathambi, president and chief executive officer of CoreLogic. “We completed the acquisition of MSB and DQ and continued to drive productivity and the transformation of our technology infrastructure. The aggressive transformation of our business operations over the past three years has underpinned our consistent outperformance of the broader housing and mortgage markets.
“Despite the historic reset in the mortgage market, we continue to aggressively build out our D&A segment and position our TPS operations to outperform their respective markets.”
In an effort to control spending, the company noted that it launched a cost reduction program designed to lower its 2014 operating expenses by at least $25 million. Cost savings relate primarily to workforce reductions, the outsourcing of certain business process functions and cuts in spending on real estate and outside services. Severance charges and savings associated with this program totaled $0.3 million and $7.2 million, respectively, for the first quarter of 2014.
As of March 31, 2014, the Company had cash and cash equivalents of $122.9 million compared with $134.7 million at December 31, 2013. CoreLogic repurchased 216,224 of its common shares for a total of $6.9 million during the first quarter.
The company’s total debt as of March 31, 2014 was approximately $1.5 billion, up $684.6 million from December 31, 2013. The increase in outstanding debt was attributable to the completion of the acquisition of MSB and DQ on March 25, 2014. In connection with this, the company executed a credit agreement to refinance its existing term loan debt and fund the acquisition.
“Our financial results were in line with our expectations in the first quarter. Importantly, we continued to take aggressive actions to transform CoreLogic into a higher-growth, higher-margin company despite challenges presented by the troughing of the mortgage market,” added Frank Martell, chief financial officer of CoreLogic. “Over the balance of 2014, we will continue to invest in areas of strategic growth and operational excellence which we believe will provide sustainable, long-term value creation.”
