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What Lies Ahead for Berkshire Hathaway (BRK.B) Q1 Earnings?
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Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report first-quarter 2018 results on May 4, after the market closes. In fourth-quarter 2017, the company delivered a negative earnings surprise of 23.73%.
Let’s see, how things are shaping up for this announcement.
Berkshire Hathaway is likely to report bottom-line growth in the soon-to-be-reported quarter, fueled by better-than-expected performance across all segments. The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.01, reflecting a noticeable improvement of 39.6% from the year-ago quarter.
Also, the tax cut, which reduced the tax rate from 35% to 21%, has likely boosted the company’s bottom line and driven its margin expansion.
The property and casualty (P&C) insurer is expected to have witnessed higher revenues as well as earnings at its Manufacturing, Service and Retailing segment owing to greater consumer demand and a favorable performance across other units.
The company’s Railroad, Utilities and Energy units have probably witnessed a rise in operating revenues, driven by a stronger contribution from both Burlington Northern SantaFe Corp. (BNSF) and Berkshire Hathaway Energy. In addition, the segment has possibly displayed improved net earnings in the yet-to-be-reported quarter, driven by an estimated increase in earnings from the railroad as well as energy businesses.
Also, strategic buyouts and investments are anticipated to have aided the company’s performance in the last completed quarter.
Being a P&C insurer, Berkshire Hathaway has perhaps incurred catastrophe loss due to unpredictable weather-related events in the soon-to-be-reported quarter. This in turn is expected to render volatility to the company’s underwriting results.
Also, the company might have suffered escalated costs and expenses, primarily due to increasing cost of sales, operating expense as well as depreciation and amortization. This rise in expenses is likely to restrict the operating margin expansion, hurting the company’s overall profitability in turn.
Our proven model does not conclusively show that Berkshire Hathaway is likely to beat on earnings this to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see 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 $2.01. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Berkshire Hathaway carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. We caution against the Sell-rated stocks (4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to surpass estimates this time around are as follows:
Banco Macro S.A. (BMA - Free Report) has an Earnings ESP of +1.23% and is a Zacks #3 Ranked player. The company is expected to release first-quarter earnings on May 9.
Apollo Investment Corporation has an Earnings ESP of +1.08% and is a Zacks #2 Ranked player. The company is slated to release first-quarter earnings on May 18.
Looking for Stocks with Skyrocketing Upside?
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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What Lies Ahead for Berkshire Hathaway (BRK.B) Q1 Earnings?
Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report first-quarter 2018 results on May 4, after the market closes. In fourth-quarter 2017, the company delivered a negative earnings surprise of 23.73%.
Let’s see, how things are shaping up for this announcement.
Berkshire Hathaway is likely to report bottom-line growth in the soon-to-be-reported quarter, fueled by better-than-expected performance across all segments. The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.01, reflecting a noticeable improvement of 39.6% from the year-ago quarter.
Also, the tax cut, which reduced the tax rate from 35% to 21%, has likely boosted the company’s bottom line and driven its margin expansion.
The property and casualty (P&C) insurer is expected to have witnessed higher revenues as well as earnings at its Manufacturing, Service and Retailing segment owing to greater consumer demand and a favorable performance across other units.
The company’s Railroad, Utilities and Energy units have probably witnessed a rise in operating revenues, driven by a stronger contribution from both Burlington Northern SantaFe Corp. (BNSF) and Berkshire Hathaway Energy. In addition, the segment has possibly displayed improved net earnings in the yet-to-be-reported quarter, driven by an estimated increase in earnings from the railroad as well as energy businesses.
Also, strategic buyouts and investments are anticipated to have aided the company’s performance in the last completed quarter.
Being a P&C insurer, Berkshire Hathaway has perhaps incurred catastrophe loss due to unpredictable weather-related events in the soon-to-be-reported quarter. This in turn is expected to render volatility to the company’s underwriting results.
Also, the company might have suffered escalated costs and expenses, primarily due to increasing cost of sales, operating expense as well as depreciation and amortization. This rise in expenses is likely to restrict the operating margin expansion, hurting the company’s overall profitability in turn.
Berkshire Hathaway Inc. Price and EPS Surprise
Berkshire Hathaway Inc. Price and EPS Surprise | Berkshire Hathaway Inc. Quote
What the Quantitative Model States
Our proven model does not conclusively show that Berkshire Hathaway is likely to beat on earnings this to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see 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 $2.01. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Berkshire Hathaway carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. We caution against the Sell-rated stocks (4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to surpass estimates this time around are as follows:
National General Holdings Corp. is set to report first-quarter earnings on May 7. The stock has an Earnings ESP of +5.59% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Banco Macro S.A. (BMA - Free Report) has an Earnings ESP of +1.23% and is a Zacks #3 Ranked player. The company is expected to release first-quarter earnings on May 9.
Apollo Investment Corporation has an Earnings ESP of +1.08% and is a Zacks #2 Ranked player. The company is slated to release first-quarter earnings on May 18.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>