Mercury General Corp's stock surged around 18% in Wednesday's pre-market trading session, following the auto insurer's strong fourth-quarter earnings beat driven by robust revenue growth. The company reported adjusted earnings of $2.78 per share, significantly higher than analysts' consensus estimate of $0.64 per share and the previous year's $1.15 per share.
Revenue for the quarter grew to $1.43 billion, surpassing expectations of $1.39 billion and marking a 18% increase from the prior year. The stellar results were attributed to higher premiums and improved underwriting performance across Mercury General's core auto insurance business.
Investors cheered the company's ability to capitalize on favorable industry trends, regain pricing power, and effectively manage claims costs. With the broader economic recovery supporting consumer demand, analysts expect Mercury General's growth momentum to continue in the coming quarters, further boosting its profitability and stock performance.
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