Mercury General Q2 Profit Rises - Update

(RTTNews) - Auto and property insurer Mercury General Corp.(MCY), Monday posted a profit for the second quarter turning around from a loss last year, as revenues increased and catastrophe losses declined. Operating profit for the quarter came in ahead of analysts' estimates, as did revenues.

Los Angeles, California-based Mercury General reported a second-quarter profit of $ 94.96 million or $1.73 per share, compared to a loss of $9.26 million or $0.17 per share in the year-ago period.

The quarter included net realized investment gains of $49.5 million, net of tax, as compared to losses of $43.8 million a year ago.

Operating profit, an important measure watched by insurance analysts as it excludes investment gains and losses, improved to $45.43 million or $0.83 per share from last year's $34.6 million or $0.63 per share last year. On average, four analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter.

Total revenues for the quarter climbed to $807.02 million from $642.57 million last year, while analysts projected revenue of $733.20 million.

Combined ratio, the percentage of premiums the insurer pays out in claims and expense, was 96.0 percent compared with 98.7 percent last year. A figure over 100 indicates that underwriting was unprofitable.

The insurer reported catastrophes loss of $2 million in the quarter, compared with last year's $13 million hurt by tornadoes in Oklahoma and severe storms in the Midwest and the Southeast region. Net investment income was $30.9 million, down from $31.7 million last year.

The company's board declared a quarterly dividend of $0.6150 per share, to be paid on September 25, to shareholders of record on September 11.

MCY is currently trading at $48.63, up $1.07 or 2.25%, on the NYSE.