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Why Is Berkshire Hathaway B (BRK.B) Down 3.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for Berkshire Hathaway B (BRK.B - Free Report) . Shares have lost about 3.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Berkshire Hathaway B due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Berkshire Q3 Earnings Up on Solid Segment Results

Berkshire Hathaway delivered third-quarter 2021 operating earnings of $6.5 billion that increased 18% year over year.

Improved performance in Insurance and Other, Railroad, Utilities and Energy as well as Manufacturing, Service and Retailing resulted in the upside.

Behind the Headlines

Revenues increased 12% year over year to $70.6 billion, attributable to higher revenues from Insurance and Other operations as well as Railroad, Utilities and Energy.

Costs and expenses increased 11.3% year over year to $63.4 billion, largely due to an increase in costs and expenses in Railroad, Utilities and Energy and Insurance and Other.

Segment Results

Berkshire Hathaway’s Insurance and Other segment revenues increased 11.9% year over year to $57.8 billion in the third quarter of 2021 on the back of higher insurance premiums earned, sales and service revenues, leasing revenues, interest, dividend and other investment income.

Railroad, Utilities and Energy operating revenues increased 12.3% year over year to $12.8 billion due to an increase in freight rail transportation revenues, energy operating revenues, service revenues and other income. Pre-tax earnings of Railroad increased 14.2% year over year to $2 billion. Pre-tax earnings of Utilities and Energy increased 22.5% year over year to $1.4 billion.

Total revenues at Manufacturing, Service and Retailing increased 12.5% year over year to $38.8 billion. Pretax earnings increased 13.3% year over year to $3.5 billion.

Financial Position

As of Sep 30, 2021, consolidated shareholders’ equity was $472.5 billion, up 6.6% from the level as of Dec 31, 2020. At quarter-end, cash and cash equivalents were $69.9 billion, down 45.8% from the level at 2020 end.

The company exited the third quarter of 2021 with a float of about $145 billion, up $7 billion from the figure at year-end 2020.

Cash flow from operating activities totaled $31.6 billion in the first nine months of 2021, up 8.2% from the year-ago period.

The company bought back shares worth $20.2 billion in the first nine months of 2021.


 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Berkshire Hathaway B has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Berkshire Hathaway B has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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