Oppenheimer Reports Falling Volumes On Lender Processing Services

According to Oppenheimer, Lender Processing Services ESI is buzz-cutting estimates as volumes fall. Oppenheimer said that it is not particularly surprised by LPS's earnings pre- announcement, but the magnitude of the miss is startling. “Citing soft fundamental trends, 2Q:FY11 guidance (issued 4/29/11) was slashed by ~31%. We believe fundamentals remain challenged as FC starts remain sluggish (~50% of the miss), the pipeline of seriously delinquent loans continues to shrink and origination/refi volumes continue to fall (~25% of the miss). LPS expects to update FY11 guidance and provide more color regarding margin expectations in July. We are reducing our FY11 and FY12 estimates to $2.54 (from $3.33) and $2.59 (from $3.55), respectively.” Lender Processing Services closed yesterday at $23.37.