Corelogic (CLGX) Tops Q1 EPS by 3c

Corelogic (NYSE: CLGX) reported Q1 EPS of $0.48, $0.03 better than the analyst estimate of $0.45. Revenue for the quarter came in at $454 million versus the consensus estimate of $438.82 million.

VSG Strategic Update

In line with CoreLogic's longstanding strategic focus on building scaled and unique data-enabled services, the Company launched the VSG during September 2015. The primary focus of the VSG is to provide unique insights into the valuation of residential properties for underwriting, risk management and opportunity generation.

As part of the launch of the VSG, the Company acquired LandSafe Appraisal Services (LAS) and the 49.9% interest of Wells Fargo Bank N.A. in RELS during the second half of 2015. Previously, CoreLogic had owned 50.1% of RELS and reported its operating results, in line with its ownership percentage, as a component of equity in earnings of affiliates. LAS and RELS provide real estate asset valuation and appraisal solutions.

During December 2015, CoreLogic also entered into an agreement to acquire FNC. FNC is a leading provider of real estate collateral information technology and solutions that automate property appraisal workflows. FNC's platforms are integrated into the workflow systems of 18 of the 20 largest U.S. banks and provide broad connectivity to approximately 80,000 appraisal, title and inspection vendors. Its solutions allow industry participants to automate the collateral valuation and diligence process, monitor and optimize vendor performance and facilitate compliance with regulatory and internal risk management policies. Following the successful completion of required closing conditions and regulatory clearance, the acquisition of FNC was consummated on April 20, 2016.

The purchase price for LAS, RELS and FNC aggregated approximately $587 million. The Company also expects to derive approximately $42 million in cash tax benefits on a net present value basis associated with the acquisitions. The aggregate purchase price, net of expected tax benefits, represents approximately 8.8 times pro forma projected full-year incremental 2016 adjusted EBITDA (excluding CoreLogic's existing 50.1% share of RELS earnings and integration costs). The acquisitions of LAS, RELS and FNC are expected to be accretive to 2016 financial results excluding one-time integration investments and reductions from transitional accounting items.

The Company believes that the VSG provides a unique opportunity for strategic growth and leadership in a highly fragmented and challenged market, and the combination of LAS, RELS and FNC, together with CoreLogic's existing property intelligence assets, provide the foundational elements of a scaled, integrated solution provider powered by a broad suite of fulfillment, platform, data and analytics capabilities and assets.

GUIDANCE:

Corelogic sees FY2016 EPS of $2.05-$2.15, versus the consensus of $2.09. Corelogic sees FY2016 revenue of $1.83-1.86 billion, versus the consensus of $1.86 billion.

For earnings history and earnings-related data on Corelogic (CLGX) click here.

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