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Berkshire (BRK.B) Q1 Earnings Up on Solid Insurance Results

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Berkshire Hathaway Inc. (BRK.B - Free Report) delivered first-quarter 2019 operating earnings of $5.9 billion that increased 5.7% year over year.

Improvement in insurance operation helped the company generate improved earnings.

Behind the Headlines

Revenues increased 1.6% year over year to $61.3 billion.

Costs and expenses increased 1.5% year over year to $54.3 billion.

Berkshire Hathaway Inc. Price, Consensus and EPS Surprise

Segment Results

Berkshire Hathaway’s Insurance and Other segment revenues increased 10% year over year to $17.4 billion in the first quarter of 2020 on the back of higher insurance premiums earned and investment income. Pretax earnings were $2.1 billion, up 16.7% year over year.

Railroad, Utilities and Energy operating revenues declined 4.8% year over year to $9.9 billion due to decrease in volume, average revenue per car/unit and soft energy business. Pretax earnings of $2 billion were down 9.1% year over year. First-quarter earnings reflected lower shipping volumes, offset by productivity improvements inducing lowered operating costs. Revenues and earnings in the first quarter of 2020 were negatively affected by COVID-19.

Total revenues at Manufacturing, Service and Retailing decreased 1.5% year over year to $33.8 billion. Pretax earnings declined 6.7% year over year to $2.7 billion. Impacts of COVID-19 weighed on the results.

Financial Position

As of Mar 31, 2020, consolidated shareholders’ equity was $371.6 billion, down 12.5% from the level as of Dec 31, 2019. At quarter end, cash and cash equivalents were $42.6 billion, down 33.6% from the level at 2019 end.

The company exited the first quarter of 2020 with a float of about $130 billion, up $1 billion from the figure at year-end 2019.

Cash flow from operating activities totaled $6.8 billion in the first quarter, declining 10.3% from year-ago quarter.

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 first-quarter earnings so far, the bottom line of Brown & Brown, Inc. (BRO - Free Report) beat estimates while that of RLI Corp. (RLI - Free Report) and Travelers Companies (TRV - Free Report) missed the same.

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