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Berkshire Hathaway (BRK.B) Q4 Earnings: What's in Store?

Berkshire Hathaway Inc. BRK.B delivered positive surprise in three of the reported quarters of 2018. The Zacks Consensus Estimate for the fourth quarter is pegged at $2.23 per share, indicating an increase of 65.2% year over year.

Let’s see what is in store for the company in the yet-to-be reported quarter.

Berkshire Hathaway’s fourth-quarter results are likely to improve on better performance across segments.

The company boasts being the second largest property and casualty insurance company in terms of premium volumes. Improved pricing, compelling suite of products, prudent underwriting and increase in policy writing are likely to boost premiums in the quarter.

Exposure to cat loss stemming from California wildfires and Hurricane Michael likely will however impact underwriting income at the insurance subsidiaries.

Berkshire Hathaway’s economically sensitive non-insurance businesses — utilities and energy plus manufacturing, service and retail — are expected to deliver better results in the quarter to be reported.

Increased unit volume is expected to support results at Burlington Northern SantaFe Corp.

Berkshire Hathaway’s Finance and Financial Products segment units — CORT (furniture) and XTRA (semi-trailers) — are industry leaders. These witnessed a considerable improvement in earnings with recovery in the soft housing market. Given the economic rebound, these are likely deliver better numbers in the to-be-reported quarter.

Strategic acquisitions should also support the company’s results.

However, expenses are likely to hamper margin expansion.

What Our Quantitative Model Predicts

Our proven model does not conclusively show that Berkshire Hathaway is likely to beat estimates this earnings season. This is because the stock has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you can see below:

Earnings ESP: Berkshire Hathaway has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at $2.23. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Berkshire Hathaway Inc. Price and EPS Surprise

Berkshire Hathaway Inc. Price and EPS Surprise | Berkshire Hathaway Inc. Quote

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Zacks Rank: Berkshire Hathaway carries a Zacks Rank #2.  Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

Conversely, we caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:

Americold Realty Trust COLD is set to report fourth-quarter earnings on Feb 21. The company has an Earnings ESP of +12.94% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agree Realty Corporation ADC has an Earnings ESP of +0.20% and a Zacks Rank of 3. The company is slated to announce fourth-quarter earnings on Feb 21.

Bank Of Montreal BMO has an Earnings ESP of +0.30% and a Zacks Rank of 3. The company is scheduled to release fourth-quarter earnings on Feb 26.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>


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Bank Of Montreal (BMO) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
Agree Realty Corporation (ADC) : Free Stock Analysis Report
 
Americold Realty Trust (COLD) : Free Stock Analysis Report
 
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