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Berkshire Hathaway Inc. (BRK.B - Free Report) delivered first-quarter 2021 operating earnings of $3.05 per share, beating the Zacks Consensus Estimate by 18.2%. The bottom line improved 26.6% year over year.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Revenues increased 5% year over year to $64.6 billion, attributable to higher insurance premiums earned, sales and service revenues, energy operating revenues, as well as Service revenues and other income.
Costs and expenses increased 3.1% year over year to $56 billion, largely due to increase in costs and expenses in Insurance and Other as well as in Railroad, Utilities and Energy.
Operating earnings of $7 billion increased 19.5% year over year. The increase was driven by higher earnings at Insurance, Railroad, Utilities and Energy, as well as Other businesses.
Segment Highlights
Berkshire Hathaway’s Insurance and Other segment revenues increased 2.5% year over year to $17.8 billion in the reported quarter on the back of higher insurance premiums earned. Pretax earnings were $2.4 billion, up 12.8% year over year. The results reflect reduced claims frequencies for private passenger automobile coverages.
Railroad, Utilities and Energy operating revenues increased 14.1% year over year to $11.3 billion. Pretax earnings of $2.3 billion were up 16.9% year over year. The results reflect higher freight volumes and lower costs due to improved productivity at railroad as well as increased earnings from the natural gas pipelines and real estate brokerage businesses, partially offset by lower earnings from the other energy businesses.
Total revenues at Manufacturing, Service and Retailing increased 1% year over year to $35.5 billion. Pretax earnings increased 23.9% year over year to $3.4 billion.
Financial Position
As of Mar 31, 2021, consolidated shareholders’ equity was about $448 billion, up 1.1% from the level as of Dec 31, 2020. At quarter end, cash and cash equivalents were $60 billion, up 25.1% from the level at 2020 end.
The company exited 2020 with a float of about $140 billion, up $2 billion from the figure at year-end 2020.
Cash flow from operating activities totaled $9.3 billion in the reported quarter, up 36.9% from the year-ago quarter.
The company bought back shares worth $6.6 billion in the reported quarter.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and RLI Corporation’s (RLI - Free Report) earnings beat the Zacks Consensus Estimate.
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Berkshire (BRK.B) Q1 Earnings Beat, Revenues Rise Y/Y
Berkshire Hathaway Inc. (BRK.B - Free Report) delivered first-quarter 2021 operating earnings of $3.05 per share, beating the Zacks Consensus Estimate by 18.2%. The bottom line improved 26.6% year over year.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Berkshire Hathaway Inc. price-consensus-eps-surprise-chart | Berkshire Hathaway Inc. Quote
Behind the Headlines
Revenues increased 5% year over year to $64.6 billion, attributable to higher insurance premiums earned, sales and service revenues, energy operating revenues, as well as Service revenues and other income.
Costs and expenses increased 3.1% year over year to $56 billion, largely due to increase in costs and expenses in Insurance and Other as well as in Railroad, Utilities and Energy.
Operating earnings of $7 billion increased 19.5% year over year. The increase was driven by higher earnings at Insurance, Railroad, Utilities and Energy, as well as Other businesses.
Segment Highlights
Berkshire Hathaway’s Insurance and Other segment revenues increased 2.5% year over year to $17.8 billion in the reported quarter on the back of higher insurance premiums earned. Pretax earnings were $2.4 billion, up 12.8% year over year. The results reflect reduced claims frequencies for private passenger automobile coverages.
Railroad, Utilities and Energy operating revenues increased 14.1% year over year to $11.3 billion. Pretax earnings of $2.3 billion were up 16.9% year over year. The results reflect higher freight volumes and lower costs due to improved productivity at railroad as well as increased earnings from the natural gas pipelines and real estate brokerage businesses, partially offset by lower earnings from the other energy businesses.
Total revenues at Manufacturing, Service and Retailing increased 1% year over year to $35.5 billion. Pretax earnings increased 23.9% year over year to $3.4 billion.
Financial Position
As of Mar 31, 2021, consolidated shareholders’ equity was about $448 billion, up 1.1% from the level as of Dec 31, 2020. At quarter end, cash and cash equivalents were $60 billion, up 25.1% from the level at 2020 end.
The company exited 2020 with a float of about $140 billion, up $2 billion from the figure at year-end 2020.
Cash flow from operating activities totaled $9.3 billion in the reported quarter, up 36.9% from the year-ago quarter.
The company bought back shares worth $6.6 billion in the reported quarter.
Zacks Rank
Berkshire Hathaway currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and RLI Corporation’s (RLI - Free Report) earnings beat the Zacks Consensus Estimate.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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