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Berkshire Hathaway (BRK.B) Q4 Earnings Rise Year Over Year
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Berkshire Hathaway Inc. (BRK.B - Free Report) delivered fourth-quarter 2023 operating earnings of $8.5 billion, which increased 28% year over year. The increase was driven by higher earnings in Insurance-underwriting and Insurance-investment income.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Costs and expenses increased 20.5% year over year to $321.1 billion, largely due to an increase in expenses at Insurance and Other as well as Railroad, Utilities and Energy. Operating earnings from the Railroad business decreased 7.7% year over year to $1.3 billion.
Full-Year Highlights
Revenues increased 20.7% year over year to $364.5 billion, attributable to higher revenues at Insurance and Other, as well as Railroad, Utilities and Energy.
Berkshire Hathaway’s Insurance and Other segment revenues increased 5.2% year over year to $263 billion in the reported quarter on the back of higher insurance premiums earned, leasing revenues and Interest, dividend and other investment income.
Insurance underwriting after-tax earnings were $5.4 billion in 2023 against losses of $30 million in the year-ago quarter. Earnings in 2023 benefited from relatively low losses from significant catastrophe events during the year and improved underwriting results at GEICO.
Railroad, Utilities and Energy operating revenues increased 94.5% year over year to $101.4 billion, attributable to higher freight rail transportation revenues, utility and energy operating revenues and service revenues and other income.
Pre-tax earnings of Railroad decreased 14.2% year over year to $6.6 billion. Total revenues at Manufacturing, Service and Retailing increased 0.4% year over year to $168 billion. Pre-tax earnings increased 2.5% year over year to $16.6 billion.
In 2023, earnings from the Manufacturing, Service and Retailing businesses rose 1.9% year over year.
Financial Position
As of Dec 31, 2023, consolidated shareholders’ equity was $561.3 billion, up 18.5% year over year. At quarter-end, cash and cash equivalents were $38.6 billion, up 6.2% from the level at 2022 end.
Berkshire exited the fourth quarter of 2023 with a float of about $169 billion, up from $164 billion reported at the end of 2022.
Cash flow from operating activities totaled $49.2 billion in 2023, up 31.7% from the year-ago period.
Berkshire Hathaway bought back shares worth $9.2 billion in 2023.
AXIS Capital Holdings Limited (AXS - Free Report) posted fourth-quarter 2023 operating income of $2.94 per share, in contrast to the Zacks Consensus Estimate of a loss of $1.25. The bottom line increased 50.8% year over year. Total operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.7%. The top line, however, declined 2.1% year over year on lower premiums earned. Net premiums written decreased 2% to $1.1 billion, attributable to a 51% decline in the Reinsurance segment, partially offset by a 9% increase in the Insurance segment. Our estimate was $1 billion.
Net investment income improved 27.2% year over year to $187 million. Our estimate was $185.2 million. Catastrophe and weather-related losses and net of reinsurance were $25.9 million, narrower than the year-ago loss of $63.6 million. AXIS Capital incurred an underwriting loss of $274.1 million against the year-ago income of $132 million.
Kinsale Capital Group (KNSL - Free Report) delivered fourth-quarter 2023 net operating earnings of $3.87 per share, which outpaced the Zacks Consensus Estimate by 12.5%. The bottom line increased 48.8% year over year. Operating revenues jumped 41.5% year over year to about $351.2 million. Revenues beat the consensus estimate by 3.8%. Gross written premiums of $395.2 million rose 33.8% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Our estimate was $372.9 million.
Net written premiums climbed 26.5% year over year to $306.3 million in the quarter. Our estimate is pegged at $308.8 million. Net investment income increased 71.2% year over year to $30.4 million in the quarter and beat our estimate of $29.8 million. The Zacks Consensus Estimate was pegged at $28.7 million. Total expenses increased 34.8% year over year to $221.1 million. Our estimate was pegged at $235.6 million. Kinsale Capital’s underwriting income was $84.8 million, which grew 42.6% year over year. Our estimate was $68.6 million.
Arch Capital Group Ltd. (ACGL - Free Report) reported fourth-quarter 2023 operating income of $2.49 per share, which beat the Zacks Consensus Estimate by 28.4%. The bottom line increased 16.4% year over year. Gross premiums written improved 12% year over year to $4.3 billion. Net premiums written climbed 7.4% year over year to $3.3 billion on higher premiums written across its Insurance and Reinsurance segments as hard market rates and rising inflation drove clients’ demand for many of its property and casualty products. Our estimate for the metric was $4.9 billion.
Net investment income increased 73% year over year to $313 million and beat our estimate of $303.2 million. The Zacks Consensus Estimate was pegged at $287 million. Operating revenues of $3.7 billion rose 24.5% year over year. It beat the Zacks Consensus Estimate by 0.2%. Pre-tax current accident year catastrophic losses, net of reinsurance and reinstatement premiums, were $137 million. Arch Capital’s underwriting income dropped 2.6% year over year to $715 million.
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Berkshire Hathaway (BRK.B) Q4 Earnings Rise Year Over Year
Berkshire Hathaway Inc. (BRK.B - Free Report) delivered fourth-quarter 2023 operating earnings of $8.5 billion, which increased 28% year over year. The increase was driven by higher earnings in Insurance-underwriting and Insurance-investment income.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Berkshire Hathaway Inc. price-consensus-eps-surprise-chart | Berkshire Hathaway Inc. Quote
Behind the Headlines
Costs and expenses increased 20.5% year over year to $321.1 billion, largely due to an increase in expenses at Insurance and Other as well as Railroad, Utilities and Energy. Operating earnings from the Railroad business decreased 7.7% year over year to $1.3 billion.
Full-Year Highlights
Revenues increased 20.7% year over year to $364.5 billion, attributable to higher revenues at Insurance and Other, as well as Railroad, Utilities and Energy.
Berkshire Hathaway’s Insurance and Other segment revenues increased 5.2% year over year to $263 billion in the reported quarter on the back of higher insurance premiums earned, leasing revenues and Interest, dividend and other investment income.
Insurance underwriting after-tax earnings were $5.4 billion in 2023 against losses of $30 million in the year-ago quarter. Earnings in 2023 benefited from relatively low losses from significant catastrophe events during the year and improved underwriting results at GEICO.
Railroad, Utilities and Energy operating revenues increased 94.5% year over year to $101.4 billion, attributable to higher freight rail transportation revenues, utility and energy operating revenues and service revenues and other income.
Pre-tax earnings of Railroad decreased 14.2% year over year to $6.6 billion.
Total revenues at Manufacturing, Service and Retailing increased 0.4% year over year to $168 billion. Pre-tax earnings increased 2.5% year over year to $16.6 billion.
In 2023, earnings from the Manufacturing, Service and Retailing businesses rose 1.9% year over year.
Financial Position
As of Dec 31, 2023, consolidated shareholders’ equity was $561.3 billion, up 18.5% year over year. At quarter-end, cash and cash equivalents were $38.6 billion, up 6.2% from the level at 2022 end.
Berkshire exited the fourth quarter of 2023 with a float of about $169 billion, up from $164 billion reported at the end of 2022.
Cash flow from operating activities totaled $49.2 billion in 2023, up 31.7% from the year-ago period.
Berkshire Hathaway bought back shares worth $9.2 billion in 2023.
Zacks Rank
Berkshire 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 Property & Casualty Insurers
AXIS Capital Holdings Limited (AXS - Free Report) posted fourth-quarter 2023 operating income of $2.94 per share, in contrast to the Zacks Consensus Estimate of a loss of $1.25. The bottom line increased 50.8% year over year. Total operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.7%. The top line, however, declined 2.1% year over year on lower premiums earned. Net premiums written decreased 2% to $1.1 billion, attributable to a 51% decline in the Reinsurance segment, partially offset by a 9% increase in the Insurance segment. Our estimate was $1 billion.
Net investment income improved 27.2% year over year to $187 million. Our estimate was $185.2 million. Catastrophe and weather-related losses and net of reinsurance were $25.9 million, narrower than the year-ago loss of $63.6 million. AXIS Capital incurred an underwriting loss of $274.1 million against the year-ago income of $132 million.
Kinsale Capital Group (KNSL - Free Report) delivered fourth-quarter 2023 net operating earnings of $3.87 per share, which outpaced the Zacks Consensus Estimate by 12.5%. The bottom line increased 48.8% year over year. Operating revenues jumped 41.5% year over year to about $351.2 million. Revenues beat the consensus estimate by 3.8%. Gross written premiums of $395.2 million rose 33.8% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Our estimate was $372.9 million.
Net written premiums climbed 26.5% year over year to $306.3 million in the quarter. Our estimate is pegged at $308.8 million. Net investment income increased 71.2% year over year to $30.4 million in the quarter and beat our estimate of $29.8 million. The Zacks Consensus Estimate was pegged at $28.7 million. Total expenses increased 34.8% year over year to $221.1 million. Our estimate was pegged at $235.6 million. Kinsale Capital’s underwriting income was $84.8 million, which grew 42.6% year over year. Our estimate was $68.6 million.
Arch Capital Group Ltd. (ACGL - Free Report) reported fourth-quarter 2023 operating income of $2.49 per share, which beat the Zacks Consensus Estimate by 28.4%. The bottom line increased 16.4% year over year. Gross premiums written improved 12% year over year to $4.3 billion. Net premiums written climbed 7.4% year over year to $3.3 billion on higher premiums written across its Insurance and Reinsurance segments as hard market rates and rising inflation drove clients’ demand for many of its property and casualty products. Our estimate for the metric was $4.9 billion.
Net investment income increased 73% year over year to $313 million and beat our estimate of $303.2 million. The Zacks Consensus Estimate was pegged at $287 million. Operating revenues of $3.7 billion rose 24.5% year over year. It beat the Zacks Consensus Estimate by 0.2%. Pre-tax current accident year catastrophic losses, net of reinsurance and reinstatement premiums, were $137 million. Arch Capital’s underwriting income dropped 2.6% year over year to $715 million.