Berkshire Hathaway Inc. (BRK.B - Free Report) delivered third-quarter 2018 earnings of $6.9 billion, nearly doubled from $3.4 billion earned in the year-ago period. This improvement was mainly attributable to solid results across all segments. Insurance segment rebounded from the year-ago loss to post profit in the reported quarter.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Behind Third-Quarter Headlines
Revenues increased 6.6% year over year to $63.5 billion.
Costs and expenses inched up 0.3% year over year to $55.3 billion.
Pre-tax income came in at $23.1 billion, increasing about four-fold 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 rose 8.1% year over year to $15.8 billion. This segment’s net earnings attributable to Berkshire Hathaway were $441 billion, rebounding from the year-ago loss of $1.4 billion.
Railroad, Utilities and Energy operating revenues grew 11.1% year over year to $11.8 billion owing to higher contribution from both Burlington Northern SantaFe Corp. (BNSF) and Berkshire Hathaway Energy. Net earnings of $1.9 billion were up 24.6% year over year, primarily banking on a 33.7% bottom-line surge in the railroad business (driven by an expanded unit volume, higher average revenue per car/unit and a lower effective tax rate) as well as a 14.6% increase in the metric from the energy business.
Total revenues at Manufacturing, Service and Retailing rose 3.7% year over year to $33.3 billion. Net earnings grew 23.8% year over year to $2.1 billion.
Revenues at the company’s Finance & Financial Products jumped nearly 13% year over year to $2.4 billion. Net earnings improved 22.2% year over year to $390 million.
As of Sep 30, 2018, consolidated shareholders’ equity was $375.6 billion, up 7.8% from the level as of Dec 31, 2017. At the reported quarter-end, cash, cash equivalents and the U.S. Treasury bills were approximately $101.4 billion, down 7.9% from the level at 2017 end.
As of Sep 30, 2018, Berkshire Hathaway’s book value was $152.47 per share.
The company exited the third quarter with a float of about $118 billion, up 1.7% from the tally at year-end 2017.
Cash flows from operating activities totaled $26.5 billion in the first nine months of 2018, plunging nearly 29% 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 third-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc.’s (TRV - Free Report) outpaced the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) missed the same.
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