Shares of Mercury General (MCY) skyrocketed 24.48% in the pre-market trading session on Wednesday, following the release of the company's stellar fourth-quarter earnings results.
The auto insurer reported adjusted earnings of $2.78 per share, significantly higher than analysts' consensus estimate of $1.12 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 an 18% increase from the prior year. This outperformance was driven by robust revenue growth, higher premiums, and improved underwriting performance across Mercury General's core auto insurance business.
Investors were buoyed by 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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