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Mercury General 3Q profit tops analysts' estimates

The Associated Press

NEWS: Mercury General said Monday that its net income dropped 40 percent in the third quarter as expenses rose and earnings from investments dropped.

The insurance company's earnings nevertheless beat analysts' estimates. It also raised its quarterly dividend.

DETAILS: Total expenses increased 5 percent to $673.9 million.

Net investment income fell to $30.9 million from $33.4 million, mainly because the company had to replace higher-yielding investments purchased when market interest rates were higher with lower yielding products, after the older holdings matured.

Net premiums written, the amount earned from premiums minus the amount paid out in commissions and reinsurance, climbed to $704.9 million from $684.9 million.

NUMBERS: Mercury General Corp. earned $39.6 million, or 72 cents per share, for the three months ended Sept. 30. That's down from $66.2 million, or $1.21 per share, a year ago.

Last year's quarter was helped by 59 cents per share in net realized investment gains.

Analysts surveyed by FactSet forecast earnings of 64 cents per share for the latest quarter.

Total revenue dipped slightly to $728.7 million from $731.8 million.

FUTURE: The company boosted its quarterly dividend to 61.5 cents from 61.25 cents. The dividend will be paid on Dec. 26 to shareholders of record on Dec. 12.

STOCK: The shares declined 79 cents to $49.18 in morning trading. The stock is up about 24 percent since the start of the year.