Citing a slowdown in its foreclosure business, The Dolan Company — the parent company of The Daily Record — Tuesday reported drops in profit and revenue for the first quarter of 2011.
Dolan reported net income of $3.4 million for the quarter, or 11 cents per share, a 62.1 percent decline from the $9.2 million, or 30 cents per share, earned in the corresponding quarter of 2010. Analysts polled by Thomson Reuters had been expecting quarterly earnings of 19 cents per share.
Total revenue for the quarter was $72.5 million, down 5.8 percent from $76.9 million during the corresponding quarter last year.
Minneapolis-based Dolan also lowered its full-year revenue guidance for 2011, saying it will be in the $308 million to $325 million range, down from $328 million to $338 million.
Shares of The Dolan Company fell 67 cents, or 5.7 percent, Tuesday to close at $11.02.
Dolan has two divisions, business information and professional services. The business information division has nearly 60 publications of mainly business and legal newspapers in 21 markets. The professional services division provides and specialized services to the legal profession through subsidiaries NDeX, Counsel Press and DiscoverReady.
“The first quarter was challenging as we experienced a slowdown in our foreclosure business,” James P. Dolan, chairman, president and CEO of the company, said in a statement. “Regulatory scrutiny has caused mortgage services to defer some foreclosure referrals while they review their internal procedures.”
He said the slowdown in default processing directly affected the company’s services division and also indirectly affected its business information division, where default-related public notices have been an important revenue source.
The company’s professional services division saw a 7.3 decrease in revenue to $52.0 million during the first quarter, while the business information division revenue was $20.6 million, down 1.7 percent from the first quarter of 2010. The professional services decline was a result of lower NDeX file volume, although DiscoverReady and Counsel Press revenue increased.
The addition of DataStream in December and Federal News Services last August helped offset a weakness in public notice advertising for the business information division. Total operating expenses within the division also rose 20 percent from the first quarter of 2010, because of operating costs with the acquisitions of the two entities.