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Berkshire Coverage

Diversification Helped Berkshire Out in First Quarter

Weaker results from BNSF were largely offset by better results from insurance and financial products, as well as the addition of Precision Castparts.

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Wide-moat rated  Berkshire Hathaway (BRK.B) released results for the first quarter of 2016 that were basically in line with our expectations, with weaker results from BNSF being largely offset by better results from insurance and finance and financial products, as well as the addition of Precision Castparts to overall results. We do not expect to change our fair value estimate.

First-quarter revenue increased 7.7% year over year to $52.4 billion, with the biggest contributions coming from Berkshire's insurance operations (where earned premiums rose 16.6% year over year), followed by its manufacturing, sales and retail operations (which benefited from the closure of the Precision Castparts acquisition) and finance and financial products (which posted 11.1% revenue growth year over year). Excluding the benefits from the Precision Castparts acquisition, first-quarter revenue increased 2.8%.

Greggory Warren does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.