ii view: Berkshire Hathaway delivers mixed results
Conglomerate Berkshire Hathaway hit by trade war and slowing US economy.
5th August 2019 10:20
by Keith Bowman from interactive investor
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Conglomerate Berkshire Hathaway hit by trade war and slowing US economy.
Second-quarter results
- Profit up 17% to $14.07 billion
- Earnings per share up 17.9% to $8,608
- Cash of $122.4 billion
ii round-up:
Berkshire Hathaway Inc B (NYSE:BRK.B) is a holding company with a wide array of subsidiaries engaged in a diverse range of activities.
Insurance and reinsurance are major industry actives, along with railway transport, utilities and energy, manufacturing and retailing and services.
The company reported mixed progress in these second-quarter results.
On a headline basis and including unrealised investment gains, profits rose by 17% to $14.07 billion. But when adjusted for investment gains, profits declined by 11% to $6.14 billion, with earnings per share missing the consensus analyst estimate.
Trade tariffs hindered cargo volumes for consumer and agricultural products at its rail transport business, while increased insurance claims dampened performance at its Geico car insurer.
ii view:
Led by legendary investor and businessman Warren Buffett, Berkshire Hathaway is tracked and invested in by large and small investors alike. A conglomerate of different businesses and investments acquired under the watchful eye of Mr Buffett, Berkshire as an American company offers investors a near one-stop investment destination.
From an investment perspective, the company’s cash balance proves a focus. A sum of $122 billion could see the company making a major acquisition. It could also provide for significant shareholder returns.
Positives:
- Diverse portfolio of industries and businesses
- Company Chairman Warren Buffett is regarded by many as a legendary investor and businessman
Negatives:
- Subject to macro-economic and geopolitical uncertainties
- Management succession risk – who might replace current Chairman Warren Buffett
The average rating of stock market analysts:
Buy
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