Mercury General Reports Revenue Beat, But Misses Non-GAAP EPS Estimates
May 3, 2023
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Mercury General ($NYSE:MCY) is a publicly-traded company headquartered in Los Angeles, California. The company specializes in offering competitively priced, customizable auto insurance policies for drivers across the US. The company has grown steadily in recent years, with a focus on providing superior service and customer satisfaction to maintain its market share. Despite their first quarter miss, Mercury General remains a strong contender in the auto insurance sector.
Earnings
MERCURY GENERAL recently reported its earning for Q4 of FY2022, ending December 31 2022, beating expectations in total revenue but missing non-GAAP EPS estimates. Total revenue from the company reached 1151.69M USD, a 9.8% increase from the previous year. Unfortunately, this was accompanied by a 122.2% decrease in net income, seeing a loss of 6.77M USD. This marks the third consecutive year that the company has seen a rise in total revenue, with it increasing from 1071.58M USD to 1151.69M USD.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Mercury General. More…
| Total Revenues | Net Income | Net Margin |
| 3.64k | -512.67 | -14.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Mercury General. More…
| Operations | Investing | Financing |
| 352.59 | -316.38 | -81.99 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Mercury General. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.51k | 4.99k | 27.49 |
Key Ratios Snapshot
Some of the financial key ratios for Mercury General are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -2.8% | – | -17.9% |
| FCF Margin | ROE | ROA |
| 8.7% | -26.6% | -6.3% |
Market Price
On Tuesday, MERCURY GENERAL reported third-quarter financial results that included revenue that beat market expectations. However, the company’s non-GAAP earnings per share (EPS) estimates came in below expectations. MERCURY GENERAL stock opened at $30.2 and closed at $29.5, down by 3.0% from its prior closing price of 30.4. Despite the miss on the EPS estimates, analysts remain optimistic about the company’s future prospects as it continues to focus on cost containment and customer satisfaction. Live Quote…
Analysis
GoodWhale conducted an analysis of MERCURY GENERAL‘s fundamentals and found it to be strong in dividend and weak in asset, growth, and profitability, as indicated by Star Chart. Despite the weaknesses, MERCURY GENERAL scored an intermediate health score of 6/10 due to its cashflows and debt, indicating that it has the capacity to sustain operations in times of crisis. We classified MERCURY GENERAL as a ‘cow’ – a type of company that has a track record of paying out consistent and sustainable dividends. Thus, investors looking for steady dividends may be interested in this company. More…
Peers
The competition between Mercury General Corp and its competitors is fierce. FedNat Holding Co, United Insurance Holdings Corp, and National Security Group Inc are all fighting for market share in the highly competitive insurance industry. Mercury General Corp has a strong reputation and a long history of success, but its competitors are constantly trying to undercut its prices and steal its customers.
– FedNat Holding Co ($NASDAQ:FNHC)
FedNat Holding Co is a regional insurance holding company. The Company, through its subsidiaries, is engaged in the business of insurance underwriting, insurance premium financing, reinsurance and catastrophe reinsurance. The Company’s principal operating subsidiaries include Federated National Insurance Company (FNIC), which is an insurance company, and Westchester Fire Insurance Company (WFC), which is a property and casualty insurance company. The Company’s segments include Property and Casualty, and Title.
– United Insurance Holdings Corp ($NASDAQ:UIHC)
United Insurance Holdings Corp is a property and casualty insurance holding company. The Company’s primary business is conducted through its subsidiaries and its insurance subsidiaries, which include United Property & Casualty Insurance Company and American Coastal Insurance Company. The Company’s lines of business include homeowners, commercial multi-peril, dwelling fire, automobile, and workers’ compensation insurance.
Summary
Mercury General is a publicly traded insurance company with a focus on automobile insurance. Recently, the company reported its Non-GAAP earnings per share (EPS) for the quarter at -$1.52, missing analyst estimates by $0.37.
However, revenue of $1.11B beat expectations by $60M. Despite this, the stock price took a hit on the same day. Analysts are suggesting that investors remain cautious on the stock due to the weak earnings result and continue to monitor the company’s performance in the coming quarters.
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