No. of Recommendations: 3
https://seekingalpha.com/news/3997677-berkshire-ha...'The broad range of businesses that Warren Buffett has assembled in Berkshire Hathaway (NYSE:BRK.B) (NYSE:BRK.A) should help to insulate it from wide swings in any one of its businesses. That's likely to keep its Q2 earnings, to be released on Saturday, fairly stable.
CFRA analyst Catherine Seifert sees the diversified revenue and earnings mix a positive for the shares, "though it leaves the firm exposed to an array of pressures facing the broader economy," she said in a recent note to clients. One such pressure is inflation.
For Q2, Seifert expects Berkshire (BRK.B) operating earnings of $3.94 per class B share compared with $4.21 in Q2 2022.
Its GEICO insurance unit's underwriting results are likely to remain under pressure due to heavy catastrophe losses in the quarter, she said. (Note that rival Allstate (ALL) suspended its stock buyback program on Tuesday after $2.7B of catastrophe losses resulted in underwriting losses in Q2.)
And while the property & casualty business suffers from a series of severe storms in the quarter, its reinsurance business is expected to benefit from pricing power. Berkshire's (BRK.B) acquisition of Alleghany Corp. in 2022 gives it an even bigger position in that sector. Seifert sees Berkshire's reinsurance businesses as "poised to leverage a 'hard' pricing environment that we expect to continue well into 2023, driven in part by an expected $55B to $70B in industry-wide insured losses from Hurricane Ian."
She sees Berkshire reinsurance units' written premium rising 8%-12% in 2023...'
