Berkshire Hathaway (BRK.B) Q2 Earnings Beat, Plunge Y/Y
Berkshire Hathaway Inc. BRK.B reported second-quarter 2016 operating earnings of $1.87 per share that beat the Zacks Consensus Estimate of $1.84. Earnings were down 19% on a year-over-year basis.
Berkshire Hathaway's lower earnings resulted from a decrease in operating earnings from Railroad, Utilities and Energy.
Revenues in the reported quarter came in at $54.5 billion, up 6% year over year.
Segment Results
Berkshire Hathaway’s huge and growing Insurance Operations have kept its underwriting profit streak alive for over 13 years. Insurance Group revenues were $12 billion, up 2.6% year over year on higher contributions from GEICO and Berkshire Hathaway Primary Group. The segment’s operating earnings before tax increased 30.8% year over year to $1.7 billion.
Railroad, Utilities and Energy operating revenues decreased 10.1% year over year to $8.9 billion due to a decline in revenues from the railroad business and soft energy business. Operating earnings of $1.8 billion were down 14.3% year over year, primarily due to a 20% plunge in earnings from the railroad business, partially offset by and a 16.7% increase in earnings from the energy business.
Total revenue at Manufacturing, Service and Retailing grew 9.3% year over year to $30.5 billion. Higher contribution from Industrial products, building products and consumer products drove the upside. Operating earnings increased 11.8% year over year to $2.3 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 11.1% year over year to $2 billion. Operating earnings before tax increased 6% year over year to $583 million.
Financial Position
Consolidated shareholders’ equity as of Jun 30, 2016 was $263 billion, up 2.9% from Dec 31, 2015. Consolidated cash approximated $72.7 billion as of Jun 30, 2016, up 1.4% from the 2015-end level. Cash from operations totaled $15.3 billion, up 10.1% year over year.
As of Jun 30, 2016, Berkshire Hathaway’s book value inched up 2.9% since year-end 2015 to $106.70 per share.
Zacks Rank
Berkshire Hathaway carries a Zacks Rank # 3 (Hold).
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 and AXIS Capital Holdings Limited AXS beat the Zacks Consensus Estimate, while earnings of and RLI Corp. RLI missed the same in the second quarter.
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