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Will Berkshire Hathaway (BRK.B) Q2 Earnings Hit the Stock?
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Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report second-quarter 2016 results on Aug 5. Last quarter, this company delivered a 13.14% negative earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing this Past Quarter
Berkshire Hathaway’s second-quarter results are expected to have benefited from the better performing utilities and energy, manufacturing, service and retail, and finance and financial products segments. Revenues from the railway business Burlington Northern SantaFe Corp, and Manufacturing, Service and Retail will likely lead to overall top-line growth.
Strategic acquisitions should continue to support results.
However, Berkshire Hathaway’s insurance business remains exposed to catastrophe. The second quarter witnessed 25 weather events resulting in a loss of $15–$20 billion for the industry. Underwriting in the insurance business was likely affected by catastrophe losses. Also, high expenses incurred on rail road operations can hurt margins.
With respect to the surprise trend, Berkshire Hathaway missed expectations in three of the last four quarters, with an average miss of 8.40%.
The company’s share price has been fluctuating over the last few days. We wait to see how the stock reacts to the quarter’s results.
Earnings Whispers
Our proven model does not conclusively show that Berkshire Hathaway will beat the Zacks Consensus Estimate in the first quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Berkshire Hathaway has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.84.
Zacks Rank: Berkshire Hathaway has a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Willis Towers Watson plc has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is slated to report second-quarter earnings results on Aug 5.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2. The company is set to report second-quarter earnings results on Aug 9.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #2. The company is slated to report second-quarter earnings results on Aug 10.
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Will Berkshire Hathaway (BRK.B) Q2 Earnings Hit the Stock?
Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report second-quarter 2016 results on Aug 5. Last quarter, this company delivered a 13.14% negative earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing this Past Quarter
Berkshire Hathaway’s second-quarter results are expected to have benefited from the better performing utilities and energy, manufacturing, service and retail, and finance and financial products segments. Revenues from the railway business Burlington Northern SantaFe Corp, and Manufacturing, Service and Retail will likely lead to overall top-line growth.
Strategic acquisitions should continue to support results.
However, Berkshire Hathaway’s insurance business remains exposed to catastrophe. The second quarter witnessed 25 weather events resulting in a loss of $15–$20 billion for the industry. Underwriting in the insurance business was likely affected by catastrophe losses. Also, high expenses incurred on rail road operations can hurt margins.
With respect to the surprise trend, Berkshire Hathaway missed expectations in three of the last four quarters, with an average miss of 8.40%.
BERKSHIRE HTH-B Price and EPS Surprise
BERKSHIRE HTH-B Price and EPS Surprise | BERKSHIRE HTH-B Quote
The company’s share price has been fluctuating over the last few days. We wait to see how the stock reacts to the quarter’s results.
Earnings Whispers
Our proven model does not conclusively show that Berkshire Hathaway will beat the Zacks Consensus Estimate in the first quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Berkshire Hathaway has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.84.
Zacks Rank: Berkshire Hathaway has a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Willis Towers Watson plc has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is slated to report second-quarter earnings results on Aug 5.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2. The company is set to report second-quarter earnings results on Aug 9.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #2. The company is slated to report second-quarter earnings results on Aug 10.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report>>