First American Financial (FAF) Up 8.4% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for First American Financial (FAF). Shares have added about 8.4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is First American Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.First American Financial Q3 Earnings Miss, Revenues TopFirst American Financial reported third-quarter 2020 operating income per share of $1.31, which missed the Zacks Consensus Estimate by about 3%. The bottom line declined 20.1% year over year. The purchase and refinance businesses continued to perform well, benefiting from strong order trends and continued focus on cost efficiency. However, expenses increased.Behind the HeadlinesOperating revenues of $1.9 billion increased 15% year over year on the back of higher agent premiums, direct premiums and escrow fees and information and other revenues. Moreover, the top line beat the Zacks Consensus Estimate by 13.2%. Net investment income however decreased 31.5% to $52.5 million.Total expense of $1.7 billion increased 17.1% year over year due to higher personnel costs, premiums retained by agents, …

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