Wide-moat Berkshire Hathaway saw solid top-line results from each of its main segments, but losses from investments, derivatives, and eliminations sent earnings lower.
Berkshire Hathaway profit declines
Noninsurance operations continue to be a source of stability, while its insurance business overall may see more meager results during the next couple of years.
2013 results once again demonstrate the value of Berkshire's diversified portfolio, as solid and consistent performance from the firm's non-insurance operations helped smooth out some of the volatility seen in its insurance businesses.
Management's ability to continuously reinvest earnings into Berkshire subsidiaries, which mostly have their own moats, will keep the firm's competitive advantages solid over time.
Just about every segment at Berkshire was dealing with elevated costs during the first quarter.
Although the public is still uncertain who will succeed the Oracle, the split-up of the chairman, CEO, and investment roles likely won't alter Berkshire's overall strategy.
In Part 1 of a 5-part series, Morningstar's Gregg Warren and Drew Woodbury explore the pros and cons of using an earnings multiple to value Berkshire Hathaway.
Alternative methods have some use, but we think discounted cash flow is the most fundamentally sound way to value the conglomerate, as we discuss in the final installment of our 5-part series.
Will the storied firm be able to extend its solid long-term track record?