LENDER PROCESSING (LPS, Financial) filed Quarterly Report for the period ended 2009-09-30.
LENDER PROCESSING SERVICES, INC. is a leading provider of integrated technology and services to the mortgage industry. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, portfolio retention and default, augmented by the company's award- winning customer support and professional services. Approximately fifty percent of all U.S. mortgages are serviced using LPS' Mortgage Servicing Package. In fact, many of the nation's top servicers rely on MSP, including seven of the top ten and sixteen of the top twenty. LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. Lender Processing has a market cap of $4.07 billion; its shares were traded at around $42.31 with a P/E ratio of 14.39 and P/S ratio of 2.18. The dividend yield of Lender Processing stocks is 0.95%.
We have approximately $1,363.4 million in long-term debt outstanding as of September 30, 2009, of which approximately $1,062.0 million bears interest at a fixed rate ($695.0 million through interest rate swaps), while the remaining portion bears interest at a floating rate. As a result of our current level of debt, we are highly leveraged and subject to risk from changes in interest rates. Having this amount of debt also makes us more susceptible to negative economic changes, as a large portion of our cash is committed to servicing our debt. Therefore, in a bad economy or if interest rates rise, it may be harder for us to attract executive talent, invest in acquisitions or new ventures, or develop new services.
Several other new pieces of legislation have recently been enacted to address the struggling mortgage market and the current economic and financial environment, including the Emergency Economic Stabilization Act of 2008, which provides broad discretion to the Secretary of the Department of the Treasury to implement a program for the purchase of up to $700 billion in troubled assets from banks and financial institutions (TARP). On March 23, 2009, the Treasury Department unveiled its plan to remove many troubled assets from banks books, representing one of the biggest efforts by the U.S. government so far to address the ongoing financial crisis. Using $75 billion to $100 billion in TARP capital and capital from private investors, the so-called Public-Private Investment Program is intended to generate $500 billion in purchasing power to buy toxic assets backed by mortgages and other loans, with the potential to expand to $1 trillion over time. The Treasury Department expects this program to help cleanse the balance sheets of many of the nations largest banks and to help get credit flowing again. The government intends to run auctions between the banks selling the assets and the investors buying them, hoping to effectively create a market for these assets.
On March 15, 2009, the Federal Reserve announced plans to provide greater support to mortgage lending and housing markets by buying up to $750 billion in mortgage-backed securities issued by agencies like Fannie Mae and Freddie Mac, bringing its total proposed purchases of these securities to $1.25 trillion in 2009, and to increase its purchases of other agency debt in 2009 by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Federal Reserve decided to purchase up to $300 billion of longer-term Treasury securities.
Other income and expense consists of interest income, interest expense and other items. The net expense was $21.1 million and $24.1 million during the third quarter of 2009 and 2008, respectively. The change during the third quarter of 2009 when compared to the third quarter of 2008 was primarily due to a decrease in interest expense resulting from lower interest rates and principal balances. Interest expense was $21.2 million and $24.6 million during the third quarter of 2009 and 2008, respectively.
Net earnings were $75.5 million and $51.3 million during the third quarter of 2009 and 2008, respectively. Net earnings per diluted share totaled $0.78 and $0.54 during the third quarter of 2009 and 2008, respectively. The increase during the third quarter of 2009 when compared to the third quarter of 2008 was a result of the factors described above.
Read the The complete ReportLPS is in the portfolios of Ronald Muhlenkamp of Muhlenkamp Fund, Andreas Halvorsen of Viking Global Investors LP, Lee Ainslie of Maverick Capital, John Keeley of Keeley Fund Management, George Soros of Soros Fund Management LLC.
LENDER PROCESSING SERVICES, INC. is a leading provider of integrated technology and services to the mortgage industry. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, portfolio retention and default, augmented by the company's award- winning customer support and professional services. Approximately fifty percent of all U.S. mortgages are serviced using LPS' Mortgage Servicing Package. In fact, many of the nation's top servicers rely on MSP, including seven of the top ten and sixteen of the top twenty. LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. Lender Processing has a market cap of $4.07 billion; its shares were traded at around $42.31 with a P/E ratio of 14.39 and P/S ratio of 2.18. The dividend yield of Lender Processing stocks is 0.95%.
Highlight of Business Operations:
According to the Mortgage Bankers Associations (the MBA) current mortgage finance forecast, U.S. mortgage originations (including refinancing) were approximately $1.5 trillion, $2.3 trillion and $2.7 trillion in 2008, 2007 and 2006, respectively. The MBAs Mortgage Finance Forecast currently estimates an approximately $2.0 trillion mortgage origination market for 2009, which would be an increase of 30% from 2008. The MBA further forecasts that this increase will result primarily from refinance transactions.We have approximately $1,363.4 million in long-term debt outstanding as of September 30, 2009, of which approximately $1,062.0 million bears interest at a fixed rate ($695.0 million through interest rate swaps), while the remaining portion bears interest at a floating rate. As a result of our current level of debt, we are highly leveraged and subject to risk from changes in interest rates. Having this amount of debt also makes us more susceptible to negative economic changes, as a large portion of our cash is committed to servicing our debt. Therefore, in a bad economy or if interest rates rise, it may be harder for us to attract executive talent, invest in acquisitions or new ventures, or develop new services.
Several other new pieces of legislation have recently been enacted to address the struggling mortgage market and the current economic and financial environment, including the Emergency Economic Stabilization Act of 2008, which provides broad discretion to the Secretary of the Department of the Treasury to implement a program for the purchase of up to $700 billion in troubled assets from banks and financial institutions (TARP). On March 23, 2009, the Treasury Department unveiled its plan to remove many troubled assets from banks books, representing one of the biggest efforts by the U.S. government so far to address the ongoing financial crisis. Using $75 billion to $100 billion in TARP capital and capital from private investors, the so-called Public-Private Investment Program is intended to generate $500 billion in purchasing power to buy toxic assets backed by mortgages and other loans, with the potential to expand to $1 trillion over time. The Treasury Department expects this program to help cleanse the balance sheets of many of the nations largest banks and to help get credit flowing again. The government intends to run auctions between the banks selling the assets and the investors buying them, hoping to effectively create a market for these assets.
On March 15, 2009, the Federal Reserve announced plans to provide greater support to mortgage lending and housing markets by buying up to $750 billion in mortgage-backed securities issued by agencies like Fannie Mae and Freddie Mac, bringing its total proposed purchases of these securities to $1.25 trillion in 2009, and to increase its purchases of other agency debt in 2009 by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Federal Reserve decided to purchase up to $300 billion of longer-term Treasury securities.
Other income and expense consists of interest income, interest expense and other items. The net expense was $21.1 million and $24.1 million during the third quarter of 2009 and 2008, respectively. The change during the third quarter of 2009 when compared to the third quarter of 2008 was primarily due to a decrease in interest expense resulting from lower interest rates and principal balances. Interest expense was $21.2 million and $24.6 million during the third quarter of 2009 and 2008, respectively.
Net earnings were $75.5 million and $51.3 million during the third quarter of 2009 and 2008, respectively. Net earnings per diluted share totaled $0.78 and $0.54 during the third quarter of 2009 and 2008, respectively. The increase during the third quarter of 2009 when compared to the third quarter of 2008 was a result of the factors described above.
Read the The complete ReportLPS is in the portfolios of Ronald Muhlenkamp of Muhlenkamp Fund, Andreas Halvorsen of Viking Global Investors LP, Lee Ainslie of Maverick Capital, John Keeley of Keeley Fund Management, George Soros of Soros Fund Management LLC.
