Monday, Mercury General Corp. (MCY), a private passenger and commercial automobile insurance company, reported a significant rise in profit for the second quarter, despite a decline in earned premiums, benefiting primarily from higher investment gains.
Net income for the second quarter increased 61.8% to $114.45 million or $2.07 per share from $70.73 million or $1.29 per share in the previous year. Net income for the quarter include net realized investment gains, net of tax, of $67.1 million or $1.21 per share, compared to $23.7 million or $0.43 per share in the same period last year.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share. Analysts' estimates typically exclude special items.
Earned premiums for the quarter were $659.21 million, compared to $711.20 million last year. Net premiums written for the quarter declined 6.8% to $637.40 million from $684.18 million a year ago. Net investment income declined to $36.21 million from $38.99 million last year.
Operating income was $47.3 million for the second quarter of 2009, a 0.7% increase over the same period in 2008. Combined ratio for the quarter was 96.1%, compared to 97.0% a year ago.
For the six-month period, net income improved to $211.10 million or $3.83 per share from $66.76 million or $1.22 per share in the same period of the previous year. Net premiums written for the period declined 7.4% to $1.31 billion from $1.41 billion a year ago.
The company declared a quarterly dividend of $0.58 per share, paid on September 30, 2009 to shareholders of record on September 16, 2009.
MCY is currently trading at $36.41, up 1.34 or 3.82%, on the NYSE.
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