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What Awaits Berkshire Hathaway (BRK.B) This Earnings Season?
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Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report third-quarter 2022 earnings soon. BRK.B delivered an earnings surprise in three of the last four quarters, and missed in one, the average being 17.6%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $3.10 per share, indicating an increase of 8% from the year-ago quarter reported figure.
Factors to Consider
Berkshire Hathaway’s higher average premiums per auto policy due to rate increases, net increases from new property business and rates may have aided premium revenues. The upside is likely to have been partly offset by a decrease in policies in-force and unfavorable foreign currency translation effects.
Per Marsh, global commercial insurance prices in the third quarter of 2022 grew 6%. The pace of rate increases has slowed for the seventh consecutive quarter since global pricing increases peaked at 22% in the fourth quarter of 2020. The price increase reflected the 20th consecutive quarter of increases since the beginning of the index in 2012.
Continued insurance business growth is expected to have increased float.
Higher fuel surcharge revenues driven by higher fuel prices, along with higher rates per car per unit, are likely to have benefited the railroad business. The upside is likely to have been partly offset by lower overall freight volumes and higher fuel costs.
The Utilities and energy business is expected to have benefited from higher earnings from tax equity investments and the natural gas pipeline and Northern Powergrid businesses. The increase is likely to have been partly offset by lower earnings from the U.S.-regulated utilities and real estate brokerage businesses.
Manufacturing, service and retailing businesses are expected to have benefited from higher customer demand for products and services in many businesses.
Strategic acquisitions are likely to have boosted the insurer’s performance.
Expenses are expected to have increased on higher insurance losses and loss adjustment expenses, cost of sales and services, interest expense, freight rail transportation expenses, utilities and energy cost of sales as well as other expenses.
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 $3.10. 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:
Blackstone Secured Lending Fund (BXSL - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank of 3. The Zacks Consensus Estimate for BXSL’s third-quarter earnings is pegged at 68 cents, indicating an increase of 7.9% from the year-ago reported figure.
Blackstone Secured Lending Fund’s earnings beat estimates in two of the last four quarters and missed in the other two.
KBC Group SA (KBCSY - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2. The Zacks Consensus Estimate for KBCSY’s third-quarter earnings is pegged at 86 cents, indicating an increase of 3.61% from the year-ago reported figure.
KBC Group’s earnings beat estimates in three of the last four quarters and missed in one.
Oaktree Specialty Lending Corp. (OCSL - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank of 3. The Zacks Consensus Estimate for OCSL’s third-quarter earnings is pegged at 19 cents, indicating an increase of 18.7% from the year-ago reported figure.
Oaktree Specialty Lending’s earnings beat estimates in three of the last four quarters and missed in one.
Image: Shutterstock
What Awaits Berkshire Hathaway (BRK.B) This Earnings Season?
Berkshire Hathaway Inc. (BRK.B - Free Report) is expected to report third-quarter 2022 earnings soon. BRK.B delivered an earnings surprise in three of the last four quarters, and missed in one, the average being 17.6%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $3.10 per share, indicating an increase of 8% from the year-ago quarter reported figure.
Factors to Consider
Berkshire Hathaway’s higher average premiums per auto policy due to rate increases, net increases from new property business and rates may have aided premium revenues. The upside is likely to have been partly offset by a decrease in policies in-force and unfavorable foreign currency translation effects.
Per Marsh, global commercial insurance prices in the third quarter of 2022 grew 6%. The pace of rate increases has slowed for the seventh consecutive quarter since global pricing increases peaked at 22% in the fourth quarter of 2020. The price increase reflected the 20th consecutive quarter of increases since the beginning of the index in 2012.
Continued insurance business growth is expected to have increased float.
Higher fuel surcharge revenues driven by higher fuel prices, along with higher rates per car per unit, are likely to have benefited the railroad business. The upside is likely to have been partly offset by lower overall freight volumes and higher fuel costs.
The Utilities and energy business is expected to have benefited from higher earnings from tax equity investments and the natural gas pipeline and Northern Powergrid businesses. The increase is likely to have been partly offset by lower earnings from the U.S.-regulated utilities and real estate brokerage businesses.
Manufacturing, service and retailing businesses are expected to have benefited from higher customer demand for products and services in many businesses.
Strategic acquisitions are likely to have boosted the insurer’s performance.
Expenses are expected to have increased on higher insurance losses and loss adjustment expenses, cost of sales and services, interest expense, freight rail transportation expenses, utilities and energy cost of sales as well as other expenses.
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 $3.10. 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 1. 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:
Blackstone Secured Lending Fund (BXSL - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank of 3. The Zacks Consensus Estimate for BXSL’s third-quarter earnings is pegged at 68 cents, indicating an increase of 7.9% from the year-ago reported figure.
Blackstone Secured Lending Fund’s earnings beat estimates in two of the last four quarters and missed in the other two.
KBC Group SA (KBCSY - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2. The Zacks Consensus Estimate for KBCSY’s third-quarter earnings is pegged at 86 cents, indicating an increase of 3.61% from the year-ago reported figure.
KBC Group’s earnings beat estimates in three of the last four quarters and missed in one.
Oaktree Specialty Lending Corp. (OCSL - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank of 3. The Zacks Consensus Estimate for OCSL’s third-quarter earnings is pegged at 19 cents, indicating an increase of 18.7% from the year-ago reported figure.
Oaktree Specialty Lending’s earnings beat estimates in three of the last four quarters and missed in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.