Berkshire Hathaway Inc.’s (BRK.B - Free Report) second-quarter 2017 operating earnings of $1.67 per share missed the Zacks Consensus Estimate by 9.7%. The bottom line also deteriorated 10.7% year over year.
The earnings decline can be attributed to lower operating earnings from Insurance Operations, plus Finance & Financial products.
Revenues in the reported quarter increased about 6% year over year to $57.5 million.
Pre-tax income of $6.1 billion declined 16.9% year over year.
Berkshire Hathaway’s huge and growing Insurance Operations segment has kept its underwriting profit streak alive for more than 14 years. Revenues from the Insurance group increased 12.1% year over year to $13.7 billion. This segment’s net earnings attributable to Berkshire Hathaway plunged 28.3% year over year to $943 million in the quarter.
Railroad, Utilities and Energy operating revenues climbed 11.2% year over year to $9.8 billion, owing to higher contribution from both BNSF and Berkshire Hathaway Energy. Net earnings of $1.5 billion were up 17.5% year over year, primarily banking on a 24.1% surge in earnings from the railroad business and a 7.1% rise in earnings from the energy business.
Total revenue at Manufacturing, Service and Retailing grew 4% year over year to $31.9 billion. Net earnings improved 11.3% year over year to $1.7 billion in the second quarter of 2017.
Revenues at the company’s Finance & Financial Products – including Clayton Homes (manufactured housing and finance), CORT Business Services (furniture rental), Marmon (rail car and other transportation equipment manufacturing, repair and leasing) and XTRA (over-the-road trailer leasing) – rose 2.2% year over year to $2.0 billion. Net earnings attributable to Berkshire Hathaway declined 16.2% year over year to $332 million in the second quarter of 2017.
As of Jun 30, 2017, consolidated shareholders’ equity was $300.7 billion, up 6.2% from Dec 31, 2016. As of Jun 30, 2017, cash, cash equivalents and the U.S. Treasury bills were approximately $60.2 billion, up 23.1% from the level at 2016-end. For the first six months of 2017, cash from operations soared 74.4% to $26.6 billion compared with $15.3 billion in the same period, last year.
As of Jun 30, 2017, Berkshire Hathaway’s book value increased 6.2% from year-end 2016 to $182.82 per share.
The company exited the quarter with float of about $107 billion.
Berkshire Hathaway currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among other players from the same space that have reported their second-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) as well as The Travelers Companies, Inc. (TRV - Free Report) missed the respective Zacks Consensus Estimate, while RLI Corp. (RLI - Free Report) beat the same.
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