Mercury General Corp. on Monday said net income fell 41 percent in the third quarter, as the auto and property insurer saw higher expenses and lower investment income. The results still exceeded Wall Street expectations.
The Los Angeles company reported net income of $39.5 million (72 cents a share), compared with $66.2 million ($1.21) in the same period a year earlier. Revenue fell less than 1 percent to less than $729 million.
Excluding realized investment gains and losses, the company reported operating income of 53 cents a share. Analysts surveyed by Thomson Reuters on average expected adjusted net income of 76 cents on revenue of less than $711 million.
Net premiums written rose 3 percent to nearly $705 million. Net investment income fell 7.5 percent to $30.9 million. The company said the decline was due to replacing higher-yielding investments with lower-yielding ones when the older investments matured. Expenses rose 5 percent to nearly $674 million.
Shares fell $1.32, or 2.6 percent, to $48.65 on the New York Stock Exchange.