Wednesday, FirstService Corp. (FSRV,FSV.TO), a diversified real estate services company, reported a swing to loss in the third quarter, primarily due to a 7% decline in revenues as well as a non-cash impairment loss and valuation allowance. The decline in revenues was mainly due to a 28% decline in revenues from Commercial Real Estate Services, partially offset by double digit revenue growth in Residential Property Management and Property Services segments.
The Canada-based company's third quarter net loss available to common shareholders was US$39.76 million or US$1.36 per share, compared to net earnings of US$5.37 million or US$0.15 per share in the same quarter last year.
Net loss from continuing operations was US$18.98 million or US$0.74 per share, compared to earnings from continuing operations of US$11.08 million or US$0.25 per share in the earlier year quarter. Adjusted net loss from continuing operations for the quarter was US$0.18 per share, compared to earnings of US$0.49 per share in the year ago quarter.
During the quarter, the company recorded a US$12.2 million non-cash impairment loss on its investment in units of Resolve Business Outsourcing Income Fund. The company also recorded a US$15.6 million non-cash valuation allowance with respect to deferred income tax assets.
In the sequential second quarter, the company reported net earnings available to common shareholders of US$78.21 million or US$2.64 per share, compared to US$15.97 million or US$0.50 per share in the prior-year second quarter. Adjusted earnings for the quarter were US$0.62 per share, compared to US$0.53 per share a year ago.
Revenues for the third quarter declined 7% to US$417.86 million from US$447.63 million in the year ago quarter.
Residential Property Management revenues increased 15% to US$144.7 million from the prior year period. In this, internal growth of 7% was attributable to property management contracts won and increases in ancillary maintenance revenues, while the balance of the revenue growth attributable to an acquisition.
Revenues in Commercial Real Estate Services declined 28% to US$182.1 million from prior year quarter, negatively impacted by the global economic slowdown and credit contraction. Internal revenues, which exclude the positive impact of acquisitions, declined 33% from the previous year.
Revenues in Property Services increased 35% to US$91.0 million over the prior year. The growth was attributable primarily to Field Asset Services, which provides property preservation and foreclosure management services to the U.S. financial services industry.
In the prior quarter, FirstService reported revenues of US$453.76 million, an increase of 19% from US$379.94 million last year.
For the first nine months of the year, FirstService reported net earnings available to common shareholders of US$54.28 million or US$1.81 per share, compared to earnings of US$39.42 million or US$1.32 per share in the prior year.
Net earnings from continuing operations were US$11.51 million or US$0.11 per share, compared to earnings of US$42.35 million or US$1.17 per share last year. Adjusted net earnings from continuing operations for the nine-month period were US$1.09 per share, compared to earnings of US$1.48 per share in the previous fiscal.
Revenues for the nine months increased 12% to US$1.32 billion from US$1.18 billion a year ago.
FSRV is currently trading at US$7.88, down US$0.37 or 4.48%, on the Nasdaq. In the past 52-week period, the stock traded in the range of US$8.02 - US$24.69, with an average 3-month volume of 24K shares.
FSV is currently trading at C$10.20, down C$0.04 or 0.39% on the TSX. In past 52-week period, the stock traded in the range of C$9.98 - C$25.00, with a three-month average volume of 103K shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.