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What's in Store for Berkshire (BRK.B) This Earnings Season?
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Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report first-quarter 2022 results soon. BRK.B delivered an earnings surprise in three of the last four quarters, the average being 11.01%.
The Zacks Consensus Estimate for the first quarter of 2022 is pegged at $3.32 per share, indicating an increase of 12.9% from the year-ago quarter reported figure.
Factors to Consider
Berkshire Hathaway’s net new business, increased participation on renewals, improved pricing and favorable foreign currency translation effects may have aided premium revenues.
Per Marsh, global commercial insurance prices in the first quarter of 2022 grew 11%. It marked the fifth consecutive reduction in rate increase since global pricing increases peaked at 22% in the fourth quarter of 2020. Pricing in financial and professional lines, mostly driven by cyber, had the highest rate of increase across the major insurance product categories, at 26%.
Continued insurance business growth is expected to have increased float.
An increase in freight volumes and lower costs due to improved productivity are likely to have benefited the railroad business.
The Utilities and energy business is expected to have benefited from higher earnings from the natural gas pipelines, including the effects of a business acquisition, and the real estate brokerage businesses.
Manufacturing, service and retailing businesses are expected to have benefited from higher customer demand in many businesses.
Strategic acquisitions are likely to have boosted the performance.
Expenses are expected to have risen on higher insurance losses and loss adjustment expenses, health insurance benefits, insurance underwriting expenses, cost of sales and services, interest expense, freight rail transportation expenses, utilities and energy cost of sales and other expenses, other expenses as well as higher interest expense.
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 $3.32. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Some stocks from the finance sector with the right combination of elements to come up with an earnings beat this time around are:
ProAssurance Corporation (PRA - Free Report) has an Earnings ESP of +27.54% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 17 cents, indicating an increase of 325% from the year-ago reported figure.
PRA’s earnings beat estimates in each of the four trailing quarters of 2021.
BRP Group (BRP - Free Report) has an Earnings ESP of +2.65% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter earnings is pegged at 51 cents, indicating an increase of 15.9% from the year-ago reported figure.
BRP delivered an earnings beat in each of the four reported quarters of 2021.
Hamilton Lane Inc. (HLNE - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 75 cents, indicating a decline of 21% from the year-ago reported figure.
HLNE’s earnings beat estimates in each of the four trailing quarters of 2021.
Image: Shutterstock
What's in Store for Berkshire (BRK.B) This Earnings Season?
Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report first-quarter 2022 results soon. BRK.B delivered an earnings surprise in three of the last four quarters, the average being 11.01%.
The Zacks Consensus Estimate for the first quarter of 2022 is pegged at $3.32 per share, indicating an increase of 12.9% from the year-ago quarter reported figure.
Factors to Consider
Berkshire Hathaway’s net new business, increased participation on renewals, improved pricing and favorable foreign currency translation effects may have aided premium revenues.
Per Marsh, global commercial insurance prices in the first quarter of 2022 grew 11%. It marked the fifth consecutive reduction in rate increase since global pricing increases peaked at 22% in the fourth quarter of 2020. Pricing in financial and professional lines, mostly driven by cyber, had the highest rate of increase across the major insurance product categories, at 26%.
Continued insurance business growth is expected to have increased float.
An increase in freight volumes and lower costs due to improved productivity are likely to have benefited the railroad business.
The Utilities and energy business is expected to have benefited from higher earnings from the natural gas pipelines, including the effects of a business acquisition, and the real estate brokerage businesses.
Manufacturing, service and retailing businesses are expected to have benefited from higher customer demand in many businesses.
Strategic acquisitions are likely to have boosted the performance.
Expenses are expected to have risen on higher insurance losses and loss adjustment expenses, health insurance benefits, insurance underwriting expenses, cost of sales and services, interest expense, freight rail transportation expenses, utilities and energy cost of sales and other expenses, other expenses as well as higher interest expense.
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 $3.32. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Berkshire Hathaway Inc. Price and EPS Surprise
Berkshire Hathaway Inc. price-eps-surprise | Berkshire Hathaway Inc. Quote
Zacks Rank: Berkshire Hathaway currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some stocks from the finance sector with the right combination of elements to come up with an earnings beat this time around are:
ProAssurance Corporation (PRA - Free Report) has an Earnings ESP of +27.54% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 17 cents, indicating an increase of 325% from the year-ago reported figure.
PRA’s earnings beat estimates in each of the four trailing quarters of 2021.
BRP Group (BRP - Free Report) has an Earnings ESP of +2.65% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter earnings is pegged at 51 cents, indicating an increase of 15.9% from the year-ago reported figure.
BRP delivered an earnings beat in each of the four reported quarters of 2021.
Hamilton Lane Inc. (HLNE - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 75 cents, indicating a decline of 21% from the year-ago reported figure.
HLNE’s earnings beat estimates in each of the four trailing quarters of 2021.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.