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Berkshire Hathaway (BRK.B) Q1 Earnings Gain From Tax Law
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Berkshire Hathaway Inc. (BRK.B - Free Report) reported first-quarter 2018 earnings of $5.3 billion, soaring 48.7% year over year. This improvement was mainly attributable to the lower effective tax rate (from the enactment of the Tax Cuts and Jobs Act of 2017).
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Revenues declined about 9.2% year over year to $58.5 billion.
Costs and expenses decreased 12.3% year over year to $52.4 billion.
Pretax loss came in at $1.5 billion against the year-ago quarter’s pre-tax income of $5.7 billion.
Segment Results
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 plunged nearly 36.3% year over year to $14.6 billion. This segment’s net earnings attributable to Berkshire Hathaway was $1.4 billion, skyrocketing 121.4% from the year-ago quarter.
Railroad, Utilities and Energy operating revenues grew 7.6% year over year to $10.1 billion owing to higher contribution from both Burlington Northern SantaFe Corp. (BNSF) and Berkshire Hathaway Energy. Net earnings of $1.7 billion were up 31.3% year over year, primarily banking on a 36.7% surge in the bottom line from the railroad business (driven by an expanded unit volume and a lower effective tax rate) as well as an increase of 21.9% in the metric from the energy business.
Total revenues at Manufacturing, Service and Retailing rose 4.7% year over year to $31.7 billion. Net earnings increased 38.3% year over year to $1.8 billion.
Revenues at the company’s Finance & Financial Products rose 11.6% year over year to $2 billion. Net earnings improved 28.5% year over year to $374 million.
Financial Position
As of Mar 31, 2018, consolidated shareholders’ equity was $347.4 billion, down 0.3% from Dec 31, 2017. At the reported quarter-end, cash, cash equivalents and the U.S. Treasury bills were approximately $98.6 billion, which skyrocketed 476.6% from the level at 2017-end.
As of Mar 31, 2018, Berkshire Hathaway’s book value grew 49.6% from the year-end 2017 to $211.18 per share.
The company exited the first quarter with a float of about $116 billion, up 1.8% from the year-end 2017.
Cash flows from operating activities totaled $7.6 billion in the quarter under review, having slumped 58.7% from the same period in 2017.
Zacks Rank
Berkshire Hathaway carries a Zacks Rank #4 (Sell).
Among other players from the insurance industry, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) metric missed the same.
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Berkshire Hathaway (BRK.B) Q1 Earnings Gain From Tax Law
Berkshire Hathaway Inc. (BRK.B - Free Report) reported first-quarter 2018 earnings of $5.3 billion, soaring 48.7% year over year. This improvement was mainly attributable to the lower effective tax rate (from the enactment of the Tax Cuts and Jobs Act of 2017).
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise | Berkshire Hathaway Inc. Quote
Behind the First-Quarter Headlines
Revenues declined about 9.2% year over year to $58.5 billion.
Costs and expenses decreased 12.3% year over year to $52.4 billion.
Pretax loss came in at $1.5 billion against the year-ago quarter’s pre-tax income of $5.7 billion.
Segment Results
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 plunged nearly 36.3% year over year to $14.6 billion. This segment’s net earnings attributable to Berkshire Hathaway was $1.4 billion, skyrocketing 121.4% from the year-ago quarter.
Railroad, Utilities and Energy operating revenues grew 7.6% year over year to $10.1 billion owing to higher contribution from both Burlington Northern SantaFe Corp. (BNSF) and Berkshire Hathaway Energy. Net earnings of $1.7 billion were up 31.3% year over year, primarily banking on a 36.7% surge in the bottom line from the railroad business (driven by an expanded unit volume and a lower effective tax rate) as well as an increase of 21.9% in the metric from the energy business.
Total revenues at Manufacturing, Service and Retailing rose 4.7% year over year to $31.7 billion. Net earnings increased 38.3% year over year to $1.8 billion.
Revenues at the company’s Finance & Financial Products rose 11.6% year over year to $2 billion. Net earnings improved 28.5% year over year to $374 million.
Financial Position
As of Mar 31, 2018, consolidated shareholders’ equity was $347.4 billion, down 0.3% from Dec 31, 2017. At the reported quarter-end, cash, cash equivalents and the U.S. Treasury bills were approximately $98.6 billion, which skyrocketed 476.6% from the level at 2017-end.
As of Mar 31, 2018, Berkshire Hathaway’s book value grew 49.6% from the year-end 2017 to $211.18 per share.
The company exited the first quarter with a float of about $116 billion, up 1.8% from the year-end 2017.
Cash flows from operating activities totaled $7.6 billion in the quarter under review, having slumped 58.7% from the same period in 2017.
Zacks Rank
Berkshire Hathaway 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 insurance industry, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) metric missed the same.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>