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Berkshire (BRK.B) Q4 Earnings Miss on Poor Segmental Results

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Berkshire Hathaway Inc. BRK.B delivered fourth-quarter 2019 earnings of $4.4 billion, down 22.7% year over year.

Operating earnings of $24 billion decreased 3.2% year over year.

The company witnessed soft performance at the Railroad, Utilities and Energy segment and higher expenses.

Berkshire Hathaway Inc. Price, Consensus and EPS Surprise

Behind the Headlines

Revenues increased 2.7% year over year to $254.6 billion.

Costs and expenses inched up 2.9% year over year to $225.7 billion.

Segment Results

Berkshire Hathaway’s Insurance and Other segment revenues increased 3.4% year over year to $211.1 billion on the back of higher insurance premiums earned, increase in sales and service revenues, leasing revenues and Interest, dividend and other investment income. This segment’s net earnings were $5.8 billion, down 4.3% year over year.

Railroad, Utilities and Energy operating revenues declined 0.5% year over year to $43.4 billion due to lower revenues from freight rail transportation, energy operations and lower service revenues and other income. Net earnings of $8.3 billion were up 6.1% year over year.

Total revenues at Manufacturing, Service and Retailing rose 1.3% year over year to $142.7 billion. Net earnings grew 0.1% year over year to $9.4 billion.

Financial Position

As of Dec 31, 2019, consolidated shareholders’ equity was $424.8 billion, up 21.8% from the level as of Dec 31, 2018. At 2019 end, cash and cash equivalents were $64.2 billion, up 111% from the level at 2018 end.

The company exited 2019 with a float of about $129 billion, up $6 billion from the figure at year-end 2018.

Cash flow from operating activities totaled $38.7 billion in 2019, declining nearly 3.4% from 2018.

Zacks Rank

Berkshire Hathaway currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurance Releases

Among other players from the insurance industry that have reported fourth-quarter earnings so far, the bottom line of Brown & Brown, Inc. BRO and RLI Corp. RLI beat the respective Zacks Consensus Estimate while that of Principal Financial PFG matched the same.

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