Revenue increased 5.4% over the same quarter a year ago, underperforming the industry average of 8.8%. The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying successful management of debt levels, but the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
Net income decreased by 44.1% to $98.37 million from $176.1 million in the same quarter a year ago, underperforming the S&P 500 and the beverages industry. Shares are down 24.8% over the past year. We believe this reflects several factors, including the market's overall decline (which was actually deeper) and the sharp decline in the company's earnings per share. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
We've downgraded Mercury General (MCY), which engages in writing private passenger and commercial automobile insurance in the U.S., from buy to hold.
The company reported a net loss of $140.54 million, or $2.57 per share, in the third quarter due to net realized investment losses. This compares with a net profit of $63.28 million, or $1.15 per share, during the same quarter a year ago. Excluding net realized investment losses of $180.03 million, or $3.29 per share, operating income was $39.49 million, or 72 cents per share, which missed the most recent consensus estimate of 90 cents per share. Net premiums written declined 8.4% year over year, to $695.14 million from $758.85 million, due to lower premiums written in California and non-California operations. Net premiums earned fell 7% to $696.61 million, hurt by lower net premiums written. Net investment income slipped 2.9% to $38.09 million due to a reduced investment portfolio. The after-tax yield on investment income remained flat at 3.9%. However, net realized investment losses stood at $180.03 million compared to a gain of $1.33 million a year ago. California net premiums written reduced 7.4% year over year to $544.32 million, and California net premiums earned dropped 5.8% to $546.18 million. Non-California net premiums written plunged 11.9% to $150.83 million, and net premiums earned sank 11.0% to $150.42 million.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV