Berkshire Hathaway Inc . BRK.B is expected to report fourth-quarter 2017 results on Feb 23, after the market closes . The company's poor earnings history shows that its bottom line missed estimates in the first three quarters of 2017.
Let's see, how things are shaping up for this announcement.
Factors to be Considered This Quarter
Earnings at Berkshire Hathaway have possibly been aided by an improved performance across all segments. However, soft underwriting results at Insurance Operations segment due to cat loss are anticipated to have weighed on the company's bottom-line improvement. In fact the Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.77, reflecting a noticeable slip of 0.6% from the year-ago quarter.
Nonetheless, a compelling array of products is expected to have driven higher revenues at Insurance Operations.
Results at Railroad, Utilities and Energy segments are projected to have benefited from higher contribution from both BNSF and Berkshire Hathaway Energy.
Also, strategic acquisitions and investments are likely to have favored the company's performance in the to-be-reported quarter.
Our proven model does not conclusively show that Berkshire Hathaway is likely to beat on earnings this quarter. This is because a stock needs to have both 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 will see below.
Zacks ESP : Berkshire Hathaway has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.77. 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
Zacks Rank : Berkshire Hathaway carries a Zacks Rank #2, which increases the predictive power of ESP. However, a company's 0.00% ESP makes surprise prediction difficult.
We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to surpass estimates in the next releases are as follows:
Bank of Montreal BMO is set to report fourth-quarter earnings on Feb 27 with an Earnings ESP of +0.60% and a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here .
Canadian Imperial Bank of Commerce CM has an Earnings ESP of +0.88% and a Zacks Rank #3. The company is set to release third-quarter earnings on Feb 22.
Eaton Vance Corporation EV has an Earnings ESP of +1.41%. This Zacks #2 Ranked player is set to announce third-quarter earnings on Feb 27.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.