Berkshire Hathaway Inc. (BRK.B - Free Report) reported second-quarter 2018 earnings of $6.9 billion, soaring 67.3% year over year. This improvement was mainly attributable to solid results across all segments.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Behind Second Quarter Headlines
Revenues increased 8.6% year over year to $62.2 billion.
Costs and expenses increased 4% year over year to $53.8 billion.
Pretax income came in at $15.1 billion, surging 146% year over year.
Berkshire Hathaway’s huge and growing Insurance Operations segment kept its underwriting profit streak alive for more than 14 years. Revenues from the Insurance group increased 13.9% year over year to $15.5 billion. This segment’s net earnings attributable to Berkshire Hathaway were $2.1 billion, having skyrocketing 121% from the year-ago quarter’s figure.
Railroad, Utilities and Energy operating revenues grew 10.9% year over year to $10.9 billion, owing to higher contribution from both Burlington Northern SantaFe Corp. (BNSF) and Berkshire Hathaway Energy. Net earnings of $1.9 billion were up 28.8% year over year, primarily banking on a 36.6% surge in the bottom line from the railroad business (driven by an expanded unit volume and a lower effective tax rate) as well as a 14.1% increase in the metric from the energy business.
Total revenues at Manufacturing, Service and Retailing rose 4.6% year over year to $33.3 billion. Net earnings increased 28.8% year over year to $2.1billion.
Revenues at the company’s Finance & Financial Products rose 17.3% year over year to $2.4 billion. Net earnings improved 32.8% year over year to $429 million.
As of Jun 30, 2018, consolidated shareholders’ equity was $358.1 billion, up 2.8% from the level as of Dec 31, 2017. At the reported quarter-end, cash, cash equivalents and the U.S. Treasury bills were approximately $111.1 billion, down 4.2% from the level at 2017 end.
As of Jun 30, 2018, Berkshire Hathaway’s book value was $145.11 per share.
The company exited the second quarter with a float of about $116 billion, up 1.8% from the tally at year-end 2017.
Cash flows from operating activities totaled $16.1 billion in the first half of 2018, slumping nearly 40% from the count registered during the same period in 2017.
Berkshire Hathaway carries a Zacks Rank #2 (Buy). 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, having already reported second-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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