Stewart Information Services (STC) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income attributable to Stewart was $17.3 million ($0.62 per diluted share), up from $15.8 million ($0.58 per diluted share) in Q2 2023, with adjusted net income at $25.4 million ($0.91 per share), nearly flat year-over-year.

• Total revenues rose to $602.2 million, up 10% year-over-year, driven by core businesses despite a challenging housing market.

• Maintained competitive edge and operational improvements, focusing on technology, talent, and targeted market expansion.

• Investment income improved 18% year-over-year, mainly due to higher interest income on eligible escrow balances.

Financial highlights

• Adjusted net income was $25.4 million, down slightly from $25.8 million in Q2 2023.

• Title segment operating revenues increased 6% year-over-year to $496.2 million; domestic commercial revenues up 23%, while domestic residential revenues fell 8%.

• Real estate solutions segment revenues grew 29% to $92.2 million, with pretax income up 56% to $5.1 million.

• Net cash provided by operations was $21.1 million, down from $35.1 million last year due to higher receivables.

• Book value per share was $49.44 at June 30, 2024, down from $50.11 at year-end 2023.

Outlook and guidance

• Management expects total mortgage originations for 2024 to be 13% higher than 2023, with lending volumes in Q3 and Q4 anticipated to improve 17% and 29% year-over-year, respectively.

• Near-term market expected to remain flat to down; company remains focused on cost management, automation, and integration of acquisitions to improve margins.

• Long-term goal to achieve low double-digit pre-tax margins as market normalizes.