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Berkshire Hathaway (BRK.B): Will its Q2 Earnings Surprise? - Analyst Blog

Berkshire Hathaway Inc.BRK.B is expected to report second-quarter 2015 results on Aug 7, after the market closes.

In the last quarter, this property and casualty insurer delivered a positive earnings surprise of 6.79%. Will Berkshire Hathaway come up with a positive surprise this earnings season? Let's see what factors might influence earnings this time around.

Factors Likely to Influence Second Quarter Results

Berkshire Hathaway's biggest segments - insurance, railroad and energy, finance and financial products - are likely to have a positive impact on the company's second-quarter earnings. Moreover, the Van Tuyl Group takeover has enabled the company to foray into automotive business. This is also expected to drive earnings growth this quarter. Acquisitions will also beef up earnings in the to be reported quarter.

However, Berkshire Hathaway's insurance business remains exposed to catastrophes and high expenses in the rail road operations, which are likely to be dampeners.

Earnings Whispers

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 Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. However, that is not the case here as you will see below.

Zacks ESP: Berkshire Hathaway's Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $2.13 per share.

Zacks Rank: Berkshire Hathaway has a Zacks Rank #3 (Hold). Though this increases the predictive power of ESP, the company's ESP of 0.00% makes surprise prediction difficult.

Stocks to Consider

Here are some companies in the finance sector, which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Ashford Hospitality Trust, Inc. AHT with an Earnings ESP of +8.70% and Zacks Rank #1 (Strong Buy).

AerCap Holdings N.V. AER with an Earnings ESP of +2.26% and a Zacks Rank #2 (Buy).

Bluerock Residential Growth REIT, Inc. BRG with an Earnings ESP of +7.14% and a Zacks Rank #3.

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BERKSHIRE HTH-B (BRK.B): Free Stock Analysis Report

BLUERCK RG REIT (BRG): Free Stock Analysis Report

ASHFORD HOSPTLY (AHT): Free Stock Analysis Report

AERCAP HLDGS NV (AER): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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