LOS ANGELES (AP) — Auto and homeowners' insurance provider Mercury General Corp. said Monday that its first-quarter net income slipped five percent as it booked higher costs and investment income declined.
The company reported net income of $58.2 million, or $1.06 per share, compared with $61.2 million, or $1.12 per share, a year ago. Operating income, which excludes investment gains and losses, fell to 72 cents per share from 85 cents, but still easily topped the 53 cents expected by analysts surveyed by FactSet.
Net investment income slipped 2 percent to $35.1 million from $35.9 million a year ago. The company also paid out more in accident claims during the quarter, compared with a year-ago period that had benefited from accounting adjustments.
Revenue rose nearly 1 percent to $705.5 million from $699.8 million, as written premiums edged higher. But higher expenses offset those gains, with costs up to $628.6 million from $618.5 million.
Mercury General reported a combined ratio of 98.2 percent, up from 96.3 percent a year ago. An insurer's combined ratio reflects the company's losses and expenses, so the increase means the company spent more of each premium dollar it received to pay out claims.
The company's board declared a quarterly dividend of 60 cents per share, the same amount paid in the previous quarter. The dividend is to be paid on June 30 to shareholders of record on June 16.
Shares of Mercury General rose 89 cents, or 2.2 percent, to $40.63 in afternoon trading.
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