Berkshire Hathaway Beats Estimates
Last week Friday, Berkshire Hathaway Inc. (NYSE:BRK.A) reported first quarter earnings which sailed past analyst expectations. The conglomerate reported net earnings of $5.16 billion, compared with $4.70 billion in the same period a year ago. Meanwhile, the Omaha-based company which is led by billionaire Warren Buffett also reported net earnings per Class A share of $3,143 compared with $2,862 from a year earlier. Also, adjusted for one-time items, compared with $2,149 a year ago, Berkshire earned $2,583 per class A share. Berkshire is well known for owing a large portfolio of assets, an insurance operation which includes Geico Corp. and also a vast selection of other businesses such as Clayton Homes, a manufacture housing provider as well as Lubrizol, a specialty chemicals maker. According to analysts polled by FactSet, there was an expectation that the company would report $2,387.79 a class A share as well as earnings of $3.6 billion in the first quarter. On Friday morning, stocks of Berkshire Hathaway traded at $214,770 per share and when the markets closed, stocks were at $215,800 per share, after surging by 1.12 percent on the day.
Last week, U.S. stocks ended on a high note. Added to this, the main benchmark indices advanced by more than 1 percent on Friday yet despite these gains, the indices still posted losses for the week. At the close of trading, the Nasdaq Composite index (COMP) rose 1.3%, or 63.97 points, to 5,005.39. For the week, the tech heavy index ended down 1.7 percent as a result of a selloff in the biotechnology industry. Meanwhile, the Dow Jones Industrial Average (DJIA) closed the week down 0.3 percent yet on Friday, the blue chip index rose 1%, or 183.54 points, to 18,024.06. Following this trend was the S&P 500 index (SPX) which climbed 1.1%, or 22.78 points, to 2,108.29 on Friday. For the week, the SPX declined 0.4%. According to data from BATS Global Markets, approximately 6.3 billion shares changed hands on U.S. exchanges on Friday as compared with the 7.2 billion daily average for the last 5 sessions.
In currency trading on Monday, the Australian dollar (AUD) declined sharply. This came in response to disappointing data from a manufacturing survey in China while building permit data out of Australia was positive. As a result, the AUD/USD traded down 0.44%, at 0.7810 while the EUR/USD also traded down 0.04% at 1.1194. Meanwhile, the USD/JPY traded flat at 120.15. According to data released from Australia, building approvals increased in March by 2.8 percent month-on-month. This overall trend is in line with the forecast by the Reserve Bank for strong growth in dwelling investment in the coming quarters. On the downside, the manufacturing survey for China of HSBC (LONDON:HSBA) declined to 48.9 in April compared with 49.2 in March. On Monday, the markets in the United Kingdom and Japan will remain close for holidays. Also, the U.S. dollar index was at 95.39, up 0.01 percent. In economic news on Monday, the U.S. is expected to publish figures on factory orders while the euro area is expected to produce revised data on manufacturing activity.
On Monday, in early morning Asian trading, crude oil prices declined. This came after the manufacturing survey in China disappointed coming in at 48.9 in April, down from 49.2 in March. WTI crude oil traded at $58.95 a barrel, down 0.35 percent on the NYMEX. On Friday last week, crude oil futures advanced to the highest levels of the year so far. Prices then turned modestly lower as investors sold off in order to lock in gains from the commodity’s recent rally. For the month of April, U.S. crude oil futures increased by 21 percent on expectations that the production of shale oil in the U.S. has now peaked and should start declining in the coming months. Meanwhile on Friday, Brent crude oil traded at $66.78 a barrel, down 0.48%, or 32 cents, on the ICE Futures Exchange in London.