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What's in Store for Berkshire Hathaway (BRK.B) in Q3 Earnings?
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Berkshire Hathaway Inc. (BRK.B - Free Report) delivered an earnings surprise of 4.59% in the second quarter of 2020. The Zacks Consensus Estimate for the third quarter of 2020 is pegged at $2.29 per share, indicating a decrease of 28.9% from the year-ago quarter reported figure.
Let’s see how things have shaped up prior to the announcement.
Berkshire Hathaway is the second largest property and casualty insurance company in terms of premium volumes. Its property and casualty insurance business generates maximum return on equity. The third quarter is likely to have witnessed catastrophe losses stemming from hurricanes Laura, Isaias, Hanna and Sally, wildfires in California and Oregon, Midwest United States Derecho windstorm. This is likely to have weighed on underwriting profit and resulted in deterioration of combined ratio.
However, better pricing, compelling product portfolio and prudent underwriting may have aided premium revenues. Continued insurance business growth is expected to have increased float.
The railroad business is expected to have been affected by the negative impact on volumes and average revenue per car/unit attributable to COVID-19 pandemic.
Lower sales are expected to have affected Manufacturing, Service and Retailing segment.
Berkshire Hathaway’s Finance and Financial Products segment units — CORT (furniture) and XTRA (semi-trailers) — are industry leaders. These have been witnessing considerable improvement in earnings with recovery in the soft housing market. However, given the pandemic, its earnings may have suffered.
Strategic acquisitions are expected to have aided the company’s performance.
However, expenses are likely to have hampered margin expansion.
Our proven model does not conclusively predict an earnings beat for Berkshire Hathaway this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings 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 $2.29. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Berkshire Hathaway currently carries a Zacks Rank of 3.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Sun Life Financial (SLF - Free Report) has an Earnings ESP of +4.65% and a Zacks Rank #3.
Voya Financial (VOYA - Free Report) has an Earnings ESP of +4.58% and a Zacks Rank of 3.
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What's in Store for Berkshire Hathaway (BRK.B) in Q3 Earnings?
Berkshire Hathaway Inc. (BRK.B - Free Report) delivered an earnings surprise of 4.59% in the second quarter of 2020. The Zacks Consensus Estimate for the third quarter of 2020 is pegged at $2.29 per share, indicating a decrease of 28.9% from the year-ago quarter reported figure.
Let’s see how things have shaped up prior to the announcement.
Berkshire Hathaway is the second largest property and casualty insurance company in terms of premium volumes. Its property and casualty insurance business generates maximum return on equity. The third quarter is likely to have witnessed catastrophe losses stemming from hurricanes Laura, Isaias, Hanna and Sally, wildfires in California and Oregon, Midwest United States Derecho windstorm. This is likely to have weighed on underwriting profit and resulted in deterioration of combined ratio.
However, better pricing, compelling product portfolio and prudent underwriting may have aided premium revenues. Continued insurance business growth is expected to have increased float.
The railroad business is expected to have been affected by the negative impact on volumes and average revenue per car/unit attributable to COVID-19 pandemic.
Lower sales are expected to have affected Manufacturing, Service and Retailing segment.
Berkshire Hathaway’s Finance and Financial Products segment units — CORT (furniture) and XTRA (semi-trailers) — are industry leaders. These have been witnessing considerable improvement in earnings with recovery in the soft housing market. However, given the pandemic, its earnings may have suffered.
Strategic acquisitions are expected to have aided the company’s performance.
However, expenses are likely to have hampered margin expansion.
Berkshire Hathaway Inc. Price and EPS Surprise
Berkshire Hathaway Inc. price-eps-surprise | Berkshire Hathaway Inc. Quote
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Berkshire Hathaway this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings 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 $2.29. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Berkshire Hathaway currently carries a Zacks Rank of 3.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Cigna (CI - Free Report) has an Earnings ESP of +1.86% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sun Life Financial (SLF - Free Report) has an Earnings ESP of +4.65% and a Zacks Rank #3.
Voya Financial (VOYA - Free Report) has an Earnings ESP of +4.58% and a Zacks Rank of 3.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>