First American Corp. Q3 2009 Earnings Call Transcript

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2009-10-29 16:36:07.0

Tags: Channel, Agency, U.S. Bancorp Piper Jaffray Inc., Call Transcript, Quarter, Earnings, First American Corp., Advertising & Promotion, Real Estate, Marketing, Business Operations, Seeking Alpha

Question-and-Answer Session

Operator

Thank you. We will now begin the question and answer session. (Operator Instructions) One moment please, for the first question. Jason Deleeuw, you may ask your question.

Jason Deleeuw - Piper Jaffray

Thanks and good morning everyone.

Parker Kennedy

Good morning.

Jason Deleeuw - Piper Jaffray

The agency revenue seemed a little stronger than what we were expecting, I'm wondering if there has been a shift to emphasize the agency channel more or is it simply just quarter-over-quarter increases that simply just due to the one quarter lag?

Dennis Gilmore

This is Dennis, let me answer that. A couple of things, first, we're very focused on the agency channel, the key distribution for us and we have seen growth in that channel and I think we'll continue to see growth in that channel. For the quarter specifically, I think a lot of has to do with the lag period between open orders and when we get -- to us.

Lot of the revenue growth, I think in the quarter had been from the second quarter, generate from the second quarter, recognized in the third quarter. But again, we're going to continue to very much focus on strategic nature of this channel and continue to grow it.

Jason Deleeuw - Piper Jaffray

Okay. I believe for what you guys were deemphasizing some of your agent relationships so, is it something, is this new or were you are now seeing opportunities in this channel.

Parker Kennedy

Couple of things, we've constantly focused on the profit during the channel and make it sure that we getting the right return on capital and we'll continue to do that. We just see opportunities now in the market place to grow here and control profitability manner.

Jason Deleeuw - Piper Jaffray

Okay. And then, on the Info Solutions business, just wondering about the cost base and is it right size now? It seems like every quarter we have a couple of... you're right sizing that cost base. So I'm wondering if there's more work to do on that front to give it to the level that you guys want it at, or is there, is the nature of this business sort of like the title business where you are going, there is going to be some continuously the right size of business given how the volumes are trending.

Frank McMahon

Jason, it's Frank. There's a couple of assets that one aspect of it will be further integration of our operating units and that's going to provide an opportunity for us to reduce our cost base when we bring First Advantage and we'll have that opportunity and reflect it to have some benefits in 2010 related to that.

 

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