Diamonds and Dogs

8/6/18

Berkshire Hathaway (BRKB) flexing it's muscle. The conglomerate run by billionaire Warren Buffett is up 3% to a five month high following earnings or the weekend. Berkshire said several business units benefited from a growing economy. Net income nearly tripled reflecting the new accounting rules requiring it to report unrealized investment gains with earnings. Buffett says the rule distorts net results and can mislead investors. Net income rose to $12.01 billion, or $7,301 per Class A share, from $4.26 billion, or $2,592 per share, a year earlier. Results also reflected a decline in Berkshire's effective income tax rate to 20 percent from 28.9 percent, following last year's cut in the federal corporate tax rate. Berkshire is based in Omaha, Nebraska, and has more than 90 businesses in the insurance, chemicals, energy, food and retail, industrial parts, railroad and other sectors.

Rubber not hitting the road. Newell Brands (NWL) is lower by 7% following earnings. Newell actually beat estimates even as revenues fell 12.8% year/year to $2.2 billion. Part of the sales decline is due to selling assets as part of plans to raise $10 billion following pressure from activist investors Carl Icahn and Starboard Value LP. Newell is prioritize deleveraging to create a simpler, faster and stronger company, but so far it's not working fast enough to appease shareholders.