Berkshire Hathaway Inc.
) is set to report second-quarter 2014 results on Aug 1.
In the last quarter, this conglomerate delivered a 1.4% negative
earnings surprise. The average beat for the trailing four quarters
Will Berkshire Hathaway be able to keep its earnings streak alive
this quarter? Let's see what factors might have influenced the
earnings report this time around.
Factors Likely to Influence Q2 Results
Berkshire Hathaway engages in a number of diverse business
activities and therefore the company's earnings are buffered from
the impact of any single factor. Several big and small acquisitions
made by Warren Buffett over the past five decades along with recent
acquisitions will drive the company's earnings. More specifically,
we expect that its biggest segments - insurance, railroad and
energy, and finance and financial products - will contribute to the
quarter's earnings to a large extent.
In the last quarter, revenues and operating expenses of the
railroad operations were negatively impacted by adverse weather
conditions and service-related challenges. We expect higher
contribution from this segment as the weather conditions reversed
in the second quarter.
Moreover, calmer-than-average weather in 2014 will result in low
claims and thus drive the company's earnings in insurance segment.
Berkshire Hathaway's finance and financial products segment
is also expected to perform well after enduring a soft housing
market in the recent past. We expect continued improving trends in
this business segment given that the housing market is gradually
Our proven model does not conclusively show that Berkshire Hathaway
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. However, that is
not the case here as you will see below.
Berkshire Hathaway's Earnings ESP is 0.00%. This is because both
the Most Accurate estimate and the Zacks Consensus Estimate are
pegged at $1.75 per share.
Berkshire Hathaway has a Zacks Rank #3 (Hold). Though Zacks Rank
#1, 2 or 3 increases the predictive power of ESP, the company's ESP
of 0.00% makes surprise prediction difficult.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows
that these have the right combination of elements to post an
earnings beat this quarter:
Voya Financial, Inc. (
) has an Earnings ESP of +2.9% and a Zacks Rank #2 (Buy).
Alliant Energy Corp. (
) has an Earnings ESP of +12.1% and Zacks Rank #3.
Protective Life Corp. (
) has an Earnings ESP of +0.8% and a Zacks Rank #3.
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BERKSHIRE HTH-B (BRK.B): Free Stock Analysis
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