Yahoo Finance Why Is Berkshire Hathaway B (BRK.B) Up 3.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Berkshire Hathaway B (BRK.B). Shares have added about 3.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Berkshire Hathaway B due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Berkshire Q1 Earnings Rise Y/Y, Segment Results Solid
Berkshire Hathaway delivered first-quarter 2024 operating earnings of $11.2 billion, which increased 39% year over year. The increase was driven by higher earnings in insurance-underwriting and insurance-investment income, other controlled businesses and non-controlled businesses.
Behind the Headlines
Revenues rose 5.2% year over year to $89.8 billion, attributable to an increase in revenues in Insurance and Other and Railroad, Utilities and Energy.
Costs and expenses increased 0.6% year over year to $76.5 billion, largely driven by a rise in costs and expenses in Railroad, Utilities and Energy.
Segment Performance
Berkshire’s Insurance and Other segment revenues increased 3.2% year over year to $65.4 billion on the back of higher insurance premiums earned, leasing revenues, interest, dividend and other investment income.
Insurance underwriting produced operating earnings of $2.6 billion, which surged nearly three-fold year over year.
Railroad operating revenues rose 4.1% year over year to $5.6 billion, reflecting lower revenues per car/unit, partially offset by higher volumes of 6.6%. Pre-tax earnings of Railroad decreased 7.9% year over year to $1.5 billion.
Operating earnings from the Railroad business declined 7.5% year over year.
Total revenues at Manufacturing, Service and Retailing decreased 1.3% year over year to $40.7 billion. Pre-tax earnings increased 1% year over year to $3.9 billion.
After-tax earnings from manufacturing, service and retailing businesses rose 1.3% year over year. This reflected growth at several manufacturing businesses, which were substantially offset by lower earnings from service and retailing businesses.
Financial Position
As of Mar 31, 2024, consolidated shareholders’ equity was $577.8 billion, up 1.8% from the level as of Dec 31, 2023. Cash and cash equivalents and restricted cash were $36.2 billion, up 32.5% from the 2023-end level.
Berkshire exited the first quarter of 2024 with a float of about $168 billion, up from $169 billion as of Dec 31, 2023.
Cash flow from operating activities totaled $10.5 billion, up 21.5% from the year-ago period.
BRK.B bought back shares worth $2.6 billion in the first quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -7.61% due to these changes.
VGM Scores
At this time, Berkshire Hathaway B has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Berkshire Hathaway B has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Berkshire Hathaway B belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, First American Financial (FAF), has gained 2.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
First American Financial reported revenues of $1.42 billion in the last reported quarter, representing a year-over-year change of -1.5%. EPS of $0.45 for the same period compares with $0.49 a year ago.
For the current quarter, First American Financial is expected to post earnings of $1.17 per share, indicating a change of -13.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for First American Financial. Also, the stock has a VGM Score of D.
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Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
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