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UPDATE 1-FirstService adj profit falls on weak U.S. foreclosures
July 25, 2012 / 1:00 PM / in 5 years

UPDATE 1-FirstService adj profit falls on weak U.S. foreclosures

(Adds details, share price)

July 25 (Reuters) - Canadian property manager FirstService Corp reported an 18 percent fall in second-quarter adjusted profit due to weakness in the U.S. foreclosure services sector.

The company’s revenue rose 5 percent to $593.2 million in the quarter, but revenue from its property services segment, which includes foreclosure services, fell 29 percent to $87.5 million.

The company manages and maintains single-family properties in the United States on a temporary basis for lenders and mortgage servicers.

Foreclosures in the United States were down 11 percent in the first half of 2012, according to RealtyTrac, a real estate information company.

Adjusted income fell to $13.7 million, or 45 cents per share, from $16.6 million, or 54 cents per share, a year earlier.

The company’s gross margin fell 2.3 percentage points to 34.8 percent in the quarter.

However, helped by lower tax costs, net profit attributable to common shareholders rose to $8.4 million, or 28 cents per share, from $3.4 million, or 11 cents per share a year earlier.

Firstservice’s revenue from its commercial real estate business, which operates in 37 countries around the world, rose 19 percent to $291.6 million.

Revenue at its residential property management business rose 9 percent to $214.1 million.

Shares of the Toronto-based company closed at C$25.77 on Tuesday on the Toronto Stock Exchange. (Reporting By Krithika Krishnamurthy and Bhaswati Mukhopadhyay in Bangalore; Editing by Sreejiraj Eluvangal)

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