Berkshire Hathaway Seeks Recovery Amid Q4 Earnings Forecast

Berkshire Hathaway Inc. aims for a profit increase as analysts anticipate Q4 EPS of $4.43, reflecting a 13% rise. However, recent operational struggles raise concerns ahead of the announcement on February 28.

Date: 28-01-2025

AI Rating: 6

Performance Overview
Berkshire Hathaway Inc. (BRK.B) showcases both potential and challenges as it approaches its fiscal Q4 2024 earnings announcement. Analysts predict an EPS of $4.43, marking a substantial increase from the $3.92 reported in the same quarter last year, indicating an optimistic outlook.
Earnings Per Share (EPS)
The projected EPS of $4.43 suggests a 13% growth compared to the previous year. Furthermore, analysts forecast a fiscal 2024 EPS of $19.78, reflecting an impressive 15.1% rise from $17.18 in fiscal 2023. This indicates strong profitability expectations moving forward.
Underperformance Context
Despite positive EPS expectations, BRK.B has struggled recently, with its stock underperforming against the S&P 500’s gain of 25.3% over the past 52 weeks. The company saw only a 23% rise in share value during the same period. Moreover, the company experienced a year-over-year decline of 6.2% in operating earnings amounting to $10.1 billion, driven by inflationary pressures and disappointing revenues.
Revenue Impacts
The Railroad, Utilities, and Energy sector in particular felt the strain, experiencing a sharp 9.1% decline in operating revenues to $23.9 billion, which notably missed estimates. This decline has led to concerns over overall profitability, especially considering the 25.4% drop in cash flow from operating activities, which fell to $26 billion.
Future Outlook
While investors might find comfort in the projected EPS growth, they could remain wary considering the company has missed consensus estimates in one of the last four quarters. Analysts hold a moderately bullish outlook with a “Moderate Buy” rating for BRK.B, indicating cautious optimism with two analysts recommending a “Strong Buy.” As the stock is currently trading below the average price target of $496.50, this could reflect short-term volatility influenced by the company's recent earnings report.
Overall, while the forecasted earnings suggest recovery potential, ongoing challenges such as rising costs and revenue misses could affect investor sentiment leading up to the earnings announcement.

Stocks: BRK.B SPX XLF