Why Is Berkshire Hathaway B (BRK.B) Up 11.1% Since Last Earnings Report?

grace williams September 9, 2024.

It has been about a month since the last earnings report for Berkshire Hathaway B (BRK.B). Shares have added about 11.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Berkshire Hathaway B due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

 

Berkshire Hathaway Q2 Earnings & Revenues Rise Y/Y

Berkshire Hathaway delivered second-quarter 2024 operating earnings of $11.6 billion, which increased 15.5% year over year. The increase was driven by higher earnings insurance underwriting and insurance-investment income.

Behind the Headlines

Revenues increased 1.2% year over year to $93.6 billion, attributable to higher revenues at Insurance and Other. 

Costs and expenses decreased 1.2% year over year to $79.6 billion, largely due to a decrease in freight rail transportation expenses, utility and energy cost of sales and other expenses, interest expense, and cost of sales and services. The figure was lower than our estimate of $86 billion.

Segment Performance

Berkshire Hathaway’s Insurance and Other segment revenues increased 4.2% year over year to $68.4 billion in the reported quarter on the back of higher insurance premiums earned, leasing revenues and interest, dividend and other investment income. 

Insurance underwriting earnings increased 81.5% year over year to $2.3 billion. 

Railroad, Utilities and Energy operating revenues decreased 6% year over year to $25.2 billion, primarily due to lower freight rail transportation revenues, utility and energy operating revenues, service revenues and other income. The figure was lower than our estimate of $28 billion. Pre-tax earnings of Railroad increased 0.5% year over year to $1.6 billion. 

Operating earnings from the Railroad business increased 0.3% year over year to $1.8 billion.

Total revenues at Manufacturing, Service and Retailing increased 0.2% year over year to $42.2 billion. Pre-tax earnings decreased 5.6% year over year to $4.2 billion.

Earnings from Manufacturing, Service and Retailing businesses decreased 5.3% year over year to $3.2 billion.

Financial Position

As of Jun 30, 2024, consolidated shareholders’ equity was $607.9 billion, up 7.1% from the level as of Dec 31, 2023. At quarter-end, cash and cash equivalents were $36.9 billion, up 9.5% from the level at 2023-end.

BRK.B exited the second quarter of 2024 with a float of about $169 billion, which remained unchanged from the figure at the end of 2023. 

Cash flow from operating activities totaled $24.2 billion in the reported quarter, up 14.5% from the year-ago period.