First American(US:FAF) ZACKS·2026-02-12 17:26Core Insights - First American Financial Corporation (FAF) reported fourth-quarter 2025 operating earnings of $1.99 per share, exceeding the Zacks Consensus Estimate by 33.6% and increasing 47.4% year over year [1][8] - Operating revenues rose 22% to $2 billion, surpassing the consensus estimate by 10% [1][8] Financial Performance - The quarterly results were bolstered by higher premiums, stronger net investment income, expanded pretax margin, and a lower claim loss rate, although elevated operating expenses partially offset these gains [2] - Direct premiums and escrow fees reached $789.4 million, a 17.3% increase from the prior year, exceeding the Zacks Consensus Estimate by 11.4% [5] - Investment income totaled $161.8 million, up 3.1% year over year, beating estimates [6] - Total revenues for the Title Insurance and Services segment rose 21% year over year to $1.9 billion, surpassing the Zacks Consensus Estimate of $1.7 billion [7] Segment Analysis - Title segment revenues grew 21%, with an adjusted pretax margin expanding 220 basis points to 14% [8][9] - Home Warranty segment revenues increased 7.3% to $110.3 million, with pretax income climbing 25.3% year over year [10] - The Corporate segment reported a net pretax loss of $24 million, an improvement from a $45 million loss in the previous year [11] Full-Year Highlights - Full-year 2025 adjusted income of $6.05 per share increased 37.5% year over year, beating the Zacks Consensus Estimate by 8.8% [12] - Total revenues for the year increased 21.6% year over year to $7.5 billion, also surpassing estimates [12] Financial Position - At the end of 2025, cash and cash equivalents were $1.4 billion, down 19.3% year over year, while stockholders' equity rose 12% to $5.5 billion [13] - Cash flow from operations was $951 million, up 6% year over year [13] Capital Deployment - The board raised the dividend by 2% to an annual rate of $2.20 per share and repurchased 2.1 million shares for $122 million [14]