Meadowbrook Insurance Plummets after Q4 Results

Shares of Meadowbrook Insurance

are seeing much pressure during Thursday's trading session after the company announced poor quarterly results yesterday. Meadowbrook Insurance reported third quarter earnings of $0.18 per share. The Street was expecting earnings per share of $0.25. The company announced that it expects to record a pre-tax expense of $7.7 million in the fourth quarter of 2011 to strengthen loss reserves. This adjustment to overall reserves is less than 0.09% of the Company's $879 million of net loss reserves and the after-tax impact of this re-estimate is $5.0 million, or $0.10 per diluted share. The Company expects to report positive fourth quarter net operating income and full year 2011 net operating income of $0.77 per diluted share to $0.79 per diluted share. Meadowbrook revised its guidance for 2012 earnings. For 2012, management now expects a GAAP combined ratio of 97.5% to 98.5%. Management continues to expect gross written premium of $890 million to $910 million. Net operating income is expected to be between $46 million and $51 million. This equates to net operating income per diluted share between $0.90 and $1.00. Currently, shares of Meadowbrook Insurance are trading over 14% lower at $9.96.