Core Insights - Berkshire Hathaway (BRK.B) is recognized for its resilience and strategic advantages, providing a diversified mix of stable earnings and long-term value compounding [1] - The company's decentralized structure allows subsidiaries to operate independently, which promotes agility and prudent management of overhead costs [1] - Berkshire's insurance segment is crucial, generating significant underwriting profits and float for investments, complemented by its railroad, utilities, and energy operations [3][8] Financial Performance - BRK.B's SG&A expenses have increased by 31% over the last two years, yet they remain stable as a percentage of revenue (approximately 6-7%) and total costs (7-8%) [2][8] - The company's SG&A expenses do not impact its insurance, railroad, utilities, or energy operations significantly [4][8] - BRK.B's shares have gained 12.9% year-to-date, outperforming the industry [7] Valuation and Estimates - BRK.B trades at a price-to-book value ratio of 1.58, slightly above the industry average of 1.54, and carries a Value Score of D [9] - The Zacks Consensus Estimate for BRK.B's fourth-quarter 2025 EPS has decreased by 15.8% recently, while the first-quarter 2026 EPS estimate has increased by 12.3% [10] - Revenue estimates for 2025 and 2026 indicate year-over-year increases, but EPS estimates show a decline for the same periods [11]
How Does BRK.B's SG&A Expense Management Impact Its Profits?