Monday, Mercury General Corp. (MCY), a provider of passenger and commercial automobile insurance, reported a loss in its fourth quarter compared to profit a year ago, hurt by substantial investment losses and a decrease in revenues.
The Los Angeles, California-based company posted a net loss of $168.35 million or $3.07 per share, compared to net income of $44.6 million or $0.81 per share in the same period last year.
Net loss for the quarter included net realized investment losses of $141.6 million or $2.59 per share, compared to net realized investment gains of $6.4 million or $0.12 per share in prior-year quarter.
The results were impacted by approximately $20 million of losses related to the Southern California wildfires in October 2008, high loss severity inflation on the California automobile lines of business, adverse development on prior periods loss reserves and poor results from New Jersey operations, according to Mercury General.
Six analysts polled by Thomson Reuters expected the company to earn $0.72 per share. Analysts' estimates typically exclude special items.
Net premiums earned for the quarter declined to $680.11 million from $735.25 million in the comparable period last year.
Net investment income of $34.9 million for the quarter decreased by 5% from $36.76 million in the same period last year.
For fiscal 2008, Mercury General's net loss was $242.1 million or $4.42 per share, compared to net income of $237.8 million or $4.34 per share in the previous year. Analysts estimated earnings of $3.32 per share for the year. Full year net premiums earned decreased to $2.809 billion from $2.994 billion a year ago.
The company declared a quarterly dividend of $0.58 per share. The dividend is to be paid on March 31 to shareholders of record on March 16.
MCY is trading down $4.85 or 11.7% at $36.35 on a volume of about 499 thousand shares.
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