Berkshire Hathaway (NYSE: BRK.B) is one of the last great conglomerates remaining in America. It is also the investment holding company – and prolific money making machine – run by Chairman and CEO, Warren Buffett.
BRK was an old textile manufacturer (founded in the 19th century) that Buffet transformed into a household name while helping him to amass a net worth of about $135 billion. He is regarded by many to be among the greatest investment managers of all time.
Several of the companies Buffett owns in BRK report earnings in the next couple days. Here’s a snapshot of what to look for.
Companies Reporting on Thursday, March 25
Each of these companies owned by BRK report earnings after the closing bell.
Capital One
Capital One Financial Corp. (NYSE: COF) ranks in the top ten of America’s largest banks. Primarily focused on consumer and commercial lending, COF is particularly known as a credit card issuer.
COF will report earnings after the market closes on Thursday, March 25th. The consensus estimate among analysts that cover COF is for earnings to come in at $3.25 per share.
A couple of the metrics investors will be looking at are funding costs and net interest income. Higher rates (the Fed Funds rate sits at its highest level in more than 20 years) impact both.
An increase in COF’s borrowing costs could negatively impact its bottom line. But higher rates may also have a positive effect on COF’s net interest income – a key driver of bank profits. Investors will likely focus on COF’s operating expenses as the great equalizer here.
BRK owns 12,471,030 shares of COF. Analysts expect COF earnings to grow about 10% for the next three to five years.
T-Mobile
Also reporting after the market closes on Thursday is T-Mobile US, Inc. (NASDAQ: TMUS). The cell phone provider is expected to post earnings of $1.83 per share of TMUS stock.
Investors and analysts may look beyond the actual numbers to hear what TMUS expects from its recent connection with SpaceX. In January, TMUS reported the launch of the first batch of Starlink satellites with Direct-to-Cell capabilities.
A discussion of field testing will likely be a component of their earnings announcement. Some analysts estimate the wireless provider will grow at about 27.5% annually between now and the end of the decade.
BRK’s stake in TMUS is 5,242,000.
Verisign
BRK owns 12,815,613 shares of VeriSign, Inc. (NASDAQ: VRSN). The company is a leader in internet infrastructure, but is likely best known for its domain name registry services. And that may be a segment investors pay attention to on Thursday.
An issue the company may address in its earnings release is the state of the domain market. That is a key driver of VRSN’s top line. Any weakness in the new .com and .net domain name business could spook investors. But that could be offset by increases in pricing.
The consensus estimate for VRSN’s quarterly earnings is $1.84 per share. Analysts’ expectations for VRSN’s forward earnings growth into the next few years isn’t readily available.
Three Companies Owned by BRK Report Earnings on Friday, March 26
The companies BRK owns that report on Friday all announce earnings before the market opens.
AON
Dublin, Ireland based AON, plc (NYSE: AON) is a global insurance giant primarily focused on commercial lines and reinsurance (insuring other insurers’ risks). AON is expected to report $5.86 per share in earnings for the quarter ended March 30th.
In the last year or so, AON sold off some of its non-core business units so that it could focus on more profitable lines. A higher return on equity could encourage investors.
BRK owns 4,100,000 shares of AON stock. Analysts estimate AON’s earnings to grow at about 10.5% for the next three to five years.
Charter Communications
The per share earnings expectations for America’s second largest provider of cable TV and broadband services, Charter Communications, Inc. (NASDAQ: CHTR) are $7.74.
Investors will likely be watching this carefully as CHTR missed the consensus number in its last quarterly filing. Leading to the miss was a roughly 23% decrease in ad revenue. So that may be a metric that could impact the way CHTR stock behaves on Friday…and beyond.
Still, the consensus of analysts that follow the company is that CHTR’s earnings will continue to grow at about a 17.7% pace for the next few years. BRK owns 3,828,941 shares of CHTR stock.
Chevron
Chevron Corp (NYSE: CVX) is one of the world’s largest oil companies and one of BRK’s five largest investments. The holding company owns 126,093,326 shares of CVX stock, a stake worth more than $20 billion.
When CVX reports on Friday morning, the consensus number is $2.84 per share. Given the recent announcement of its acquisition of Hess Corporation (NYSE: HES), at least a portion of the earnings discussion may include how CVX intends to incorporate HES into its already massive operations.
Analysts who cover CVX stock expect its earnings to grow by 5% annually for the next three to five years.
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