Berkshire Hathaway Inc. (BRK.B) reported second-quarter 2014 operating earnings of $1.75 per share, in line with the Zacks Consensus Estimate. Earnings compared favorably with $1.59 per share reported in the year-ago quarter. The earnings growth came from an increase in revenue across all segments.
Total revenue came in at $49.8 billion, up 11.3% year over year. The increase was driven by higher contribution from Insurance, Railroad, Utilities and Energy as well as Finance and Financial Products segments.
Total cost and expense of $40.8 billion increased 8.1% year over year.
Segment Results
Berkshire Hathaway's Insurance Group revenues increased 4.5% year over year to $10.8 billion led by higher premium earned from GEICO, General Re and Berkshire Hathaway Primary Group, partly offset by a decline in premium from Berkshire Hathaway Reinsurance Group.
Railroad, Utilities and Energy operating revenues increased 18.4% year over year to $9.9 billion. Of the total segment revenue, more than half came from Burlington Northern Santa Fe, the railroad company, which was acquired in Feb 2010.
Total revenue at Manufacturing, Service and Retailing which includes McLane, Iscar and Lubrizol increased 5.7% year over year to $24.9 billion. The improvement was primarily attributable to higher contribution from the service segment along with growth in other sub-segments.
Revenues from Finance & Financial Products which includes Clayton Homes (manufactured housing and finance), CORT Business Services (furniture rental), Marmon (rail car and other transportation equipment manufacturing, repair, and leasing) and XTRA (over-the-road trailer leasing) increased 7.5% year over year to $1.6 billion.
Financial Position
Consolidated shareholders’ equity at Jun 30, 2014 was $234.0 billion, reflecting an increase of 5.2% since Dec 31, 2013. Consolidated cash and investments of insurance and other businesses approximated $207.5 billion at quarter end, and included cash and cash equivalents of $49.2 billion.
At Jun 30, 2014, Berkshire Hathaway's book value increased 5.6% since year-end 2013 to $95 per share.
Other Stocks
Berkshire Hathaway carries a Zacks Rank #3 (Hold). Better-ranked players from the same industry include Endurance Specialty Holdings Ltd. (ENH), AmTrust Financial Services, Inc. (AFSI) and White Mountains Insurance Group, Ltd. (WTM). All these stocks hold a Zacks Rank #1 (Strong Buy).
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