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Why Is Berkshire Hathaway (BRK.B) Down 1.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Berkshire Hathaway B (BRK.B - Free Report) . Shares have lost about 1.4% 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 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Berkshire Hathaway Q4 Earnings Rise Year Over Year
Berkshire Hathaway 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.
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.
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
At this time, Berkshire Hathaway 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 has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Berkshire Hathaway is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Palomar (PLMR - Free Report) , a stock from the same industry, has gained 7.9%. The company reported its results for the quarter ended December 2023 more than a month ago.
Palomar Holdings reported revenues of $102.35 million in the last reported quarter, representing a year-over-year change of +16.6%. EPS of $1.11 for the same period compares with $0.82 a year ago.
For the current quarter, Palomar Holdings is expected to post earnings of $0.93 per share, indicating a change of +16.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.8% over the last 30 days.
Palomar Holdings has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Berkshire Hathaway (BRK.B) Down 1.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Berkshire Hathaway B (BRK.B - Free Report) . Shares have lost about 1.4% 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 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Berkshire Hathaway Q4 Earnings Rise Year Over Year
Berkshire Hathaway 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.
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.
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
At this time, Berkshire Hathaway 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 has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Berkshire Hathaway is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Palomar (PLMR - Free Report) , a stock from the same industry, has gained 7.9%. The company reported its results for the quarter ended December 2023 more than a month ago.
Palomar Holdings reported revenues of $102.35 million in the last reported quarter, representing a year-over-year change of +16.6%. EPS of $1.11 for the same period compares with $0.82 a year ago.
For the current quarter, Palomar Holdings is expected to post earnings of $0.93 per share, indicating a change of +16.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.8% over the last 30 days.
Palomar Holdings has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.