Yahoo Finance Why Is Berkshire Hathaway Inc. (BRK.B) Down 1% Since Last Earnings Report?
It has been about a month since the last earnings report for Berkshire Hathaway Inc. (BRK.B). Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Berkshire Hathaway Inc. due for a breakout? 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 drivers.
Berkshire Q1 Earnings Up on Solid Insurance Results
Berkshire Hathaway delivered first-quarter 2019 operating earnings of $5.9 billion that increased 5.7% year over year.
Better 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.
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. Pre taxPretax 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, decrease in average revenue per car/unit and soft energy business. Pre taxPretax 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. Both rRevenues 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. Pre taxPretax 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 $42.64 billion, down 33.6% from the level at 2019 end.
The company exited the first quarter if 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -14.63% due to these changes.
VGM Scores
Currently, Berkshire Hathaway Inc. has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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