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Berkshire Hathaway B (BRK.B) Up 1.5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Berkshire Hathaway B (BRK.B - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Berkshire Hathaway B due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Berkshire Hathaway delivered third-quarter 2023 operating earnings of $10.8 billion, which increased 40.6% year over year. The increase was driven by higher earnings in Insurance-underwriting and Insurance-investment income, other controlled businesses and Pilot Travel Centers.
Behind the Headlines
Revenues increased 21.2% year over year to $93.2 billion, attributable to higher revenues at Insurance and Other, as well as Railroad, Utilities and Energy.
Costs and expenses decreased 1.4% year over year to $56.3 billion, largely due to a decrease in insurance losses and loss adjustment expenses and the cost of sales and services. The figure was lower than our estimate of $66.9 billion.
Segment Performance
Berkshire Hathaway’s Insurance and Other segment revenues increased 6.8% year over year to $66.9 billion in the reported quarter on the back of higher insurance premiums earned, leasing revenues and interest, dividend and other investment income.
Insurance underwriting earnings were $2.4 billion in the quarter against losses of $1.1 billion from the year-ago quarter. Earnings in 2023 benefited from relatively lower catastrophe losses. Underwriting earnings in 2023 also reflected improved results at GEICO.
Railroad, Utilities and Energy operating revenues increased 84.6% year over year to $26.2 billion, attributable to higher utility and energy operating revenues. Pre-tax earnings of Railroad decreased 14.6% year over year to $1.6 billion.
Operating earnings from the Railroad business decreased 14.2% year over year to $1.8 billion.
Total revenues at Manufacturing, Service and Retailing increased 1.1% year over year to $42.6 billion. Pre-tax earnings increased 4.3% year over year to $4.4 billion.
In the reported quarter, earnings from the Manufacturing, Service and Retailing businesses increased 2.9% year over year.
Financial Position
As of Sep 30, 2023, consolidated shareholders’ equity was $531.5 billion, up 10.3% from the level as of Dec 31, 2022. At quarter-end, cash and cash equivalents were $25.6 billion, down 20.7% from the level at 2022 end.
Berkshire exited the second quarter of 2023 with a float of about $167 billion, up from $164 billion from the figure at year-end 2022.
Cash flow from operating activities totaled $34.8 billion in the first nine months of 2023, up 28.7% from the year-ago period.
Berkshire Hathaway bought back shares worth $7 billion in the first nine months of 2023.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Berkshire Hathaway B has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Berkshire Hathaway B has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Berkshire Hathaway B is part of the Zacks Insurance - Property and Casualty industry. Over the past month, American Financial Group (AFG - Free Report) , a stock from the same industry, has gained 6%. The company reported its results for the quarter ended September 2023 more than a month ago.
American Financial reported revenues of $2.07 billion in the last reported quarter, representing a year-over-year change of +6%. EPS of $2.45 for the same period compares with $2.24 a year ago.
American Financial is expected to post earnings of $2.83 per share for the current quarter, representing a year-over-year change of -5.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.1%.
American Financial has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Berkshire Hathaway B (BRK.B) Up 1.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Berkshire Hathaway B (BRK.B - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Berkshire Hathaway B due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Berkshire Hathaway Q3 Earnings & Revenues Rise Y/Y
Berkshire Hathaway delivered third-quarter 2023 operating earnings of $10.8 billion, which increased 40.6% year over year. The increase was driven by higher earnings in Insurance-underwriting and Insurance-investment income, other controlled businesses and Pilot Travel Centers.
Behind the Headlines
Revenues increased 21.2% year over year to $93.2 billion, attributable to higher revenues at Insurance and Other, as well as Railroad, Utilities and Energy.
Costs and expenses decreased 1.4% year over year to $56.3 billion, largely due to a decrease in insurance losses and loss adjustment expenses and the cost of sales and services. The figure was lower than our estimate of $66.9 billion.
Segment Performance
Berkshire Hathaway’s Insurance and Other segment revenues increased 6.8% year over year to $66.9 billion in the reported quarter on the back of higher insurance premiums earned, leasing revenues and interest, dividend and other investment income.
Insurance underwriting earnings were $2.4 billion in the quarter against losses of $1.1 billion from the year-ago quarter. Earnings in 2023 benefited from relatively lower catastrophe losses. Underwriting earnings in 2023 also reflected improved results at GEICO.
Railroad, Utilities and Energy operating revenues increased 84.6% year over year to $26.2 billion, attributable to higher utility and energy operating revenues. Pre-tax earnings of Railroad decreased 14.6% year over year to $1.6 billion.
Operating earnings from the Railroad business decreased 14.2% year over year to $1.8 billion.
Total revenues at Manufacturing, Service and Retailing increased 1.1% year over year to $42.6 billion. Pre-tax earnings increased 4.3% year over year to $4.4 billion.
In the reported quarter, earnings from the Manufacturing, Service and Retailing businesses increased 2.9% year over year.
Financial Position
As of Sep 30, 2023, consolidated shareholders’ equity was $531.5 billion, up 10.3% from the level as of Dec 31, 2022. At quarter-end, cash and cash equivalents were $25.6 billion, down 20.7% from the level at 2022 end.
Berkshire exited the second quarter of 2023 with a float of about $167 billion, up from $164 billion from the figure at year-end 2022.
Cash flow from operating activities totaled $34.8 billion in the first nine months of 2023, up 28.7% from the year-ago period.
Berkshire Hathaway bought back shares worth $7 billion in the first nine months of 2023.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Berkshire Hathaway B has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Berkshire Hathaway B has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Berkshire Hathaway B is part of the Zacks Insurance - Property and Casualty industry. Over the past month, American Financial Group (AFG - Free Report) , a stock from the same industry, has gained 6%. The company reported its results for the quarter ended September 2023 more than a month ago.
American Financial reported revenues of $2.07 billion in the last reported quarter, representing a year-over-year change of +6%. EPS of $2.45 for the same period compares with $2.24 a year ago.
American Financial is expected to post earnings of $2.83 per share for the current quarter, representing a year-over-year change of -5.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.1%.
American Financial has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.