Mercury General Earnings Preview

Mercury General (NYSE: MCY  ) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings Monday. Mercury General and its subsidiaries are engaged in writing automobile insurance in a number of states, mainly California. The company also writes homeowner, mechanical breakdown, fire, umbrella, and commercial automobile and property insurance.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Mercury General with four of six analysts rating it hold. Analysts still rate the stock a moderate sell, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $680.5 million in revenue this quarter. That would represent a decline of 11.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.67 per share. Estimates range from $0.55 to $0.78.

What our community says:
CAPS All-Stars are solidly behind the stock with 91.2% giving it an "outperform" rating. The community at large backs the All-Stars with 84.3% awarding it a rating of "outperform." Fools are bullish on Mercury General, though the message boards have been quiet lately with only 42 posts in the past 30 days. Mercury General has a bullish CAPS rating of four out of five stars that is about on par with the Fool community assessment.

Management:
The company's revenue has now risen for two straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Net Margin

8.1%

8.3%

(3.6%)

12.6%

One final thing: If you want to keep tabs on Mercury General movements, and for more analysis on the company, make sure you add it to your watchlist.

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