Mercury General Reports Q4 2024 EPS of $2.78, Revenue Misses at $1.366B, Combined Ratio 91.4%, Stock Jumps 20%

Mercury General Corporation reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $2.78, significantly exceeding the estimate of $1.12, marking a year-over-year increase of 141.7%. However, the company's revenue for the quarter was $1.366 billion, falling short of the anticipated $1.400 billion, reflecting a slight decline of 0.6% compared to the previous year. The net premiums earned were reported at $1.352 billion, surpassing the estimate of $1.325 billion, and showing an increase of 18.1% year-over-year. The combined ratio improved to 91.4%, compared to the estimated 101.8%, indicating enhanced operational efficiency. Despite the positive EPS and net premiums earned, analysts noted estimated gross losses ranging from $1.6 billion to $2.0 billion, which may be revised lower due to omitted reinstatement premiums and reimbursements. Following the earnings report, Mercury General's stock price rose by 20% in pre-market trading, reflecting investor optimism, particularly in light of the company's commentary on California wildfires and their impact on losses.