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Berkshire Hathaway Inc.’s (BRK.B - Free Report) third-quarter 2016 operating earnings of $1.97 per share beat the Zacks Consensus Estimate of $1.88. Earnings were up 6.5% on a year-over-year basis.
Berkshire Hathaway's earnings improvement was driven by an increase in operating earnings from Utilities and Energy, Manufacturing, Service and Retailing as well as Finance & Financial Products.
Revenues in the reported quarter inched up 0.3% year over year to $59.1 billion.
Segment Results
Berkshire Hathaway’s huge and growing Insurance Operations segment has kept its underwriting profit streak alive for over 13 years. Insurance group’s revenues grew 8.6% year over year to $11.4 billion on higher contributions from GEICO and Berkshire Hathaway Primary Group. The segment’s operating earnings before tax decreased 17.6% year over year to $1.4 billion.
Railroad, Utilities and Energy operating revenues decreased 3.7% year over year to $10.9 billion due to a decline in revenues from the railroad business. Operating earnings of $2.8 billion were down 20% year over year, primarily due to a 17.6% plunge in earnings from the railroad business, partially offset by and a 9% increase in earnings from the energy business.
Total revenue at Manufacturing, Service and Retailing grew 7.3% year over year to $30.7 billion. Higher contribution from industrial products, building products and consumer products drove the upside. Operating earnings surged 47% year over year to $2.5 billion.
Revenues at Berkshire Hathaway's Finance & Financial Products – including Clayton Homes (manufactured housing and finance), CORT Business Services (furniture rental), Marmon (rail car and other transportation equipment manufacturing, repair, and leasing), and XTRA (over-the-road trailer leasing) – jumped to $4.8 billion from $0.9 billion in the year-ago quarter. Operating earnings before tax increased 6.4% year over year to $583 million.
Financial Position
Consolidated shareholders’ equity as of Sep 30, 2016 was $269.3 billion, up 5.4% from Dec 31, 2015. Consolidated cash approximated $85 billion as of Sep 30, 2016, up 18% from the 2015-end level. Cash from operations totaled $25.2 billion in the first nine months of 2016, up 4.1% year over year.
As of Sep 30, 2016, Berkshire Hathaway’s book value inched up 5.3% from year-end 2015 to $109.19 per share.
The bottom line at The Travelers Companies, Inc. (TRV - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same in the third quarter.
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Berkshire Hathaway (BRK.B) Q3 Earnings Beat, Improve Y/Y
Berkshire Hathaway Inc.’s (BRK.B - Free Report) third-quarter 2016 operating earnings of $1.97 per share beat the Zacks Consensus Estimate of $1.88. Earnings were up 6.5% on a year-over-year basis.
Berkshire Hathaway's earnings improvement was driven by an increase in operating earnings from Utilities and Energy, Manufacturing, Service and Retailing as well as Finance & Financial Products.
Revenues in the reported quarter inched up 0.3% year over year to $59.1 billion.
Segment Results
Berkshire Hathaway’s huge and growing Insurance Operations segment has kept its underwriting profit streak alive for over 13 years. Insurance group’s revenues grew 8.6% year over year to $11.4 billion on higher contributions from GEICO and Berkshire Hathaway Primary Group. The segment’s operating earnings before tax decreased 17.6% year over year to $1.4 billion.
Railroad, Utilities and Energy operating revenues decreased 3.7% year over year to $10.9 billion due to a decline in revenues from the railroad business. Operating earnings of $2.8 billion were down 20% year over year, primarily due to a 17.6% plunge in earnings from the railroad business, partially offset by and a 9% increase in earnings from the energy business.
Total revenue at Manufacturing, Service and Retailing grew 7.3% year over year to $30.7 billion. Higher contribution from industrial products, building products and consumer products drove the upside. Operating earnings surged 47% year over year to $2.5 billion.
Revenues at Berkshire Hathaway's Finance & Financial Products – including Clayton Homes (manufactured housing and finance), CORT Business Services (furniture rental), Marmon (rail car and other transportation equipment manufacturing, repair, and leasing), and XTRA (over-the-road trailer leasing) – jumped to $4.8 billion from $0.9 billion in the year-ago quarter. Operating earnings before tax increased 6.4% year over year to $583 million.
Financial Position
Consolidated shareholders’ equity as of Sep 30, 2016 was $269.3 billion, up 5.4% from Dec 31, 2015. Consolidated cash approximated $85 billion as of Sep 30, 2016, up 18% from the 2015-end level. Cash from operations totaled $25.2 billion in the first nine months of 2016, up 4.1% year over year.
As of Sep 30, 2016, Berkshire Hathaway’s book value inched up 5.3% from year-end 2015 to $109.19 per share.
Zacks Rank
Berkshire Hathaway carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
BERKSHIRE HTH-B Price, Consensus and EPS Surprise
BERKSHIRE HTH-B Price, Consensus and EPS Surprise | BERKSHIRE HTH-B Quote
Performance of Other P&C Insurers
The bottom line at The Travelers Companies, Inc. (TRV - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same in the third quarter.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>