Mercury General Q3 Profit Declines, But Tops View

(RTTNews) - Auto and property insurer Mercury General Corp.(MCY), Monday reported a drop in profit for the third quarter, hurt largely by investment losses that offset increase in premiums earned. Nevertheless, operating profit for the quarter improved, beating Wall Street estimates comfortably.

Los Angeles, California-based Mercury General's third-quarter profit dropped to $31.3 million or $0.57 per share from $39.6 million or $0.72 per share last year.

The quarter included net realized investment losses of $20.1 million, as compared to gains of $16.2 million a year ago.

Operating income, an important measure watched by insurance analysts as it excludes investment gains and losses, rose to $44.4 million or $0.81 per share from $29.0 million or $0.53 per share last year. On average, 5 analysts polled by Thomson Reuters expected earnings of $0.63 per share for the quarter.

Total revenues for the third quarter declined to $720.0 million from $728.7 million last year. Net premium earned rose to $705.2 million from $678.9 million a year ago.

Combined ratio, the percentage of premiums the insurer pays out in claims and expense, was 96.7 percent compared with 99.2 percent last year. A figure over 100 indicates that underwriting was unprofitable.

The company also declared a quarterly dividend of $0.6175 per share, payable on December 26 to shareholders of record on December 12.

MCY is currently trading at $54.43, up $1.31 or 2.47%, on the NYSE.