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Berkshire Hathaway (BRK.B) Q4 Earnings Benefit From Tax Cut
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Berkshire Hathaway Inc. (BRK.B - Free Report) reported fourth-quarter 2017 earnings of $32.6 billion, increasing more than fivefold year over year. The quarter largely benefited from enactment of the 2017 Tax Act.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
For 2017, earnings shot up nearly 87% year over year to $44.9 billion
Delving Deeper
Revenues improved about 8.3% year over year to $242.1 billion in 2017.
Costs and expenses increased 15.9% year over year to $221.2 billion in 2017.
Pretax income of $23.8 billion in 2017 plunged 29.2% year over year.
Segment Results for 2017
Berkshire Hathaway’s huge and growing Insurance Operations segment has kept its underwriting profit streak alive for more than 14 years. However, due to havoc wreaked by the cat events that dented underwriting results, the company incurred underwriting loss in 2017. Revenues from the Insurance group surged nearly 30% year over year to $65.5 billion. This segment’s net loss attributable to Berkshire Hathaway was $1.7 billion, slumping 66% in 2017.
Railroad, Utilities and Energy operating revenues grew 6.4% year over year to $40.3 billion owing to higher contribution from both BNSF and Berkshire Hathaway Energy. Net earnings of $6 billion were up 3.4% year over year, primarily banking on a 10.9% rise in earnings from the railroad business (driven by expanded unit volume), partially offset by an 8.9% decline in earnings from the energy business.
Total revenues at Manufacturing, Service and Retailing rose 5.4% year over year to $126.5 billion. Net earnings attributable to Berkshire Hathaway improved 10.2% year over year to $6.2 billion in 2017.
Revenues at the company’s Finance & Financial Products rose 9.1% year over year to $8.4 billion. Net earnings declined 6.4% year over year to $1.3 million in 2017.
Financial Position
As of Dec 31, 2017, consolidated shareholders’ equity was $348.3 billion, up 23.5% from Dec 31, 2016. As of Dec 31, 2017, cash, cash equivalents and the U.S. Treasury bills were approximately $17.1 billion, up 50% from the level at 2016-end.
As of Dec 31, 2017, Berkshire Hathaway’s book value increased 23% from the year-end 2016 to $141.17 per share.
The company exited 2017 with a float of about $114 billion.
Cash flows from operating activities totaled $45.8 billion in 2017, up 40.7% from 2016.
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line of The Progressive Corp. (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
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Berkshire Hathaway (BRK.B) Q4 Earnings Benefit From Tax Cut
Berkshire Hathaway Inc. (BRK.B - Free Report) reported fourth-quarter 2017 earnings of $32.6 billion, increasing more than fivefold year over year. The quarter largely benefited from enactment of the 2017 Tax Act.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise | Berkshire Hathaway Inc. Quote
For 2017, earnings shot up nearly 87% year over year to $44.9 billion
Delving Deeper
Revenues improved about 8.3% year over year to $242.1 billion in 2017.
Costs and expenses increased 15.9% year over year to $221.2 billion in 2017.
Pretax income of $23.8 billion in 2017 plunged 29.2% year over year.
Segment Results for 2017
Berkshire Hathaway’s huge and growing Insurance Operations segment has kept its underwriting profit streak alive for more than 14 years. However, due to havoc wreaked by the cat events that dented underwriting results, the company incurred underwriting loss in 2017. Revenues from the Insurance group surged nearly 30% year over year to $65.5 billion. This segment’s net loss attributable to Berkshire Hathaway was $1.7 billion, slumping 66% in 2017.
Railroad, Utilities and Energy operating revenues grew 6.4% year over year to $40.3 billion owing to higher contribution from both BNSF and Berkshire Hathaway Energy. Net earnings of $6 billion were up 3.4% year over year, primarily banking on a 10.9% rise in earnings from the railroad business (driven by expanded unit volume), partially offset by an 8.9% decline in earnings from the energy business.
Total revenues at Manufacturing, Service and Retailing rose 5.4% year over year to $126.5 billion. Net earnings attributable to Berkshire Hathaway improved 10.2% year over year to $6.2 billion in 2017.
Revenues at the company’s Finance & Financial Products rose 9.1% year over year to $8.4 billion. Net earnings declined 6.4% year over year to $1.3 million in 2017.
Financial Position
As of Dec 31, 2017, consolidated shareholders’ equity was $348.3 billion, up 23.5% from Dec 31, 2016. As of Dec 31, 2017, cash, cash equivalents and the U.S. Treasury bills were approximately $17.1 billion, up 50% from the level at 2016-end.
As of Dec 31, 2017, Berkshire Hathaway’s book value increased 23% from the year-end 2016 to $141.17 per share.
The company exited 2017 with a float of about $114 billion.
Cash flows from operating activities totaled $45.8 billion in 2017, up 40.7% from 2016.
Zacks Rank
Berkshire Hathaway carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line of The Progressive Corp. (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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