Berkshire Hathaway (BRK.B) delivered third-quarter 2024 operating earnings of $10.1 billion, which decreased 6.2% year over year. The decrease was attributable to lower revenues coupled with higher costs.

Behind the Headlines

Revenues slipped 0.2% year over year to $93 billion, attributable to lower revenues at Insurance and Other as well as Railroad, Utilities and Energy.

Costs and expenses increased 0.7% year over year to $81.2 billion, largely due to an increase in Insurance and Other expenses. Higher losses and loss adjustment expenses, insurance underwriting expenses, cost of leasing and selling, general and administrative expenses fueled the increase. The figure was lower than our estimate of $85.9 billion.

Berkshire Hathaway Inc. Price, Consensus and EPS Surprise

Berkshire Hathaway Inc. price-consensus-eps-surprise-chart | Berkshire Hathaway Inc. Quote

Segment Performance

Berkshire Hathaway’s Insurance and Other segment revenues increased 9.9% year over year to $26.7 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 5.1% year over year to $5.6 billion.

Railroad, Utilities and Energy operating revenues decreased 9.1% year over year to $23.9 billion, primarily due to lower utility and energy operating revenues. The figure was lower than our estimate of $28.6 billion. Pre-tax earnings of Railroad increased 83.6% year over year to $3.2 billion.

Total revenues at Manufacturing, Service and Retailing decreased 0.8% 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 5.1% year over year to $4.2 billion.

Financial Position

As of Sept. 30, 2024, consolidated shareholders’ equity was $629.1 billion, up 12.1% from the level as of Dec. 31, 2023. At quarter-end, cash and cash equivalents were $32.3 billion, down 4.1% from the level at 2023-end.

BRK.B exited the third quarter of 2024 with a float of about $174 billion, which increased $5 billion from the figure at the end of 2023.

Cash flow from operating activities totaled $26 billion in the reported quarter, down 25.4% from the year-ago period.

Berkshire Hathaway bought back shares worth $2.9 billion in the first nine months of 2024.

Zacks Rank

BRK.B currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

The Travelers Companies TRV reported third-quarter 2024 core income of $5.24 per share, which beat the Zacks Consensus Estimate by 38.2%. Total revenues increased 10.7% from the year-ago quarter to $11.84 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 1.4%.

Travelers’ net written premiums increased 8% year over year to a record $11.31 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.5 billion. Travelers witnessed an underwriting gain of $685 million against a loss of $136 million incurred in the year-ago quarter. The consolidated underlying combined ratio of 85.6 improved 500 bps year over year. The combined ratio improved 780 bps year over year to 93.2 due to an improvement in the underlying combined ratio and net favorable prior-year reserve development.

The Progressive Corporation’s PGR third-quarter 2024 earnings per share of $3.97 beat the Zacks Consensus Estimate of $3.40. The bottom line more than doubled year over year.  Operating revenues of $19.5 billion improved 24.9% year over year and beat the consensus estimate by 2.6%.

Net premiums written were $19.5 billion in the quarter, up 25% from $15.6 billion a year ago. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 340 bps from the prior-year quarter’s level to 89.

RLI Corp. RLI reported third-quarter 2024 operating earnings of $1.31 per share, beating the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues for the reported quarter were $426 million, up 1.4% year over year. The top line beat the Zacks Consensus Estimate of $420 million.

Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Our estimate was $572.3 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 bps year over year to 89.6. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 103.1.