Categories
NetJets

Private Jet Travel Soars: NetJets Reports Strong Revenue Growth

While the COVID-19 pandemic dealt a significant blow to commercial airlines with a sharp decline in travel, it unexpectedly ushered in a private jet travel boom for those with the means to indulge. Surprisingly, this trend continues to flourish, even as commercial jet travel makes a comeback. Berkshire Hathaway’s NetJets, a prominent player in the private aviation industry, has reported impressive revenue growth, with an 8.3% increase in the third quarter and an 11.5% rise in the first nine months of 2023 compared to the same period in 2022.

The surge in revenues can be attributed to several factors, including the expansion of shared aircraft ownership programs and a year-to-date surge in flight hours across NetJets’ diverse programs, all accompanied by higher average rates.

Notably, NetJets has been actively expanding its capacity, aiming to capitalize on the booming demand for private jet travel. In a significant move, the company joined forces with Textron Aviation in September, signing a record-breaking fleet agreement. This agreement grants NetJets the option to purchase up to 1,500 additional Cessna Citation business jets over the next 15 years. It extends NetJets’ existing fleet agreement and includes provisions for an increasing number of aircraft each year.

The surge in NetJets’ revenues paints a clear picture of the growing popularity of private jet travel. As travelers seek the flexibility, privacy, and safety that private aviation offers, companies like NetJets are poised for continued success. Even as commercial airlines make their comeback, the private jet industry is flying high, proving that luxury and convenience are increasingly becoming a top priority for those who can afford it.

© 2023 David Mazor

David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
BYD

BYD Breaks Records and Expands Into Hungary

(BRK.A), (BRK.B)

BYD, the Chinese automobile manufacturer with the backing of Berkshire Hathaway, is making waves in the automotive industry, setting new sales records and expanding its reach.

In October, the company achieved an astounding milestone by selling 301,833 electric vehicles (EVs), surpassing its previous monthly sales record by 8.85 percent and, for the first time, crossing the 300,000-vehicle mark.

BYD’s remarkable success is further underscored by its year-on-year sales growth of 220.3 percent. These figures attest to the company’s growing dominance in the fiercely competitive automotive market as it ventures into new territories.

The expansion of BYD into Hungary is a testament to the company’s commitment to sustainable transportation. Hungary becomes the 19th European country to embrace BYD’s vision of eco-friendly mobility, marking a significant milestone for both the company and the Hungarian market.

BYD’s success in the new energy vehicle (NEV) sector is no accident. The company has been a pioneer in the NEV revolution, leveraging its expertise in battery technology and electric powertrains to create a range of popular vehicles that are not only environmentally friendly but also performance-oriented.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Marmon Group

Leadership Transition and Expansion at Marmon Rail’s North American Leasing Business

(BRK.A), (BRK.B)

Marmon Rail, a subsidiary of Berkshire Hathaway, is witnessing significant leadership changes and expansion in its North American railcar leasing operations. Kate Suprenuk has been appointed as the President of Railcar Leasing North America for Marmon Rail. In this new role, Suprenuk will spearhead the leasing activities of Union Tank Car Company (UTLX) and Procor Limited, covering all railcar leasing endeavors under Marmon Holdings in North America. Notably, Randy Pocrnick, the President of Procor Leasing, will continue in his current role and report directly to Suprenuk.

Suprenuk’s promotion aligns with the announcement of the impending retirement of Bill Constantino, who currently serves as the Group President of Marmon Rail Leasing. Effective January 1, 2024, Constantino will transition into the role of Senior Vice President of Advisory Services, with plans to retire later in the year.

Mark Carrier, the Executive Vice President of Marmon Rail & Crane Groups, expressed confidence in Suprenuk’s abilities, stating, “Kate has been an integral part of Marmon Rail during her seven years with the company. Her experience, enthusiasm, and leadership make her the ideal candidate to assume this critical role.”

Kate Suprenuk expressed her honor and eagerness to lead the organization, stating, “I am honored to lead this exceptional organization and look forward to working with our dedicated employees to continue to provide excellent railcar products and services across North America.”

Suprenuk has a wealth of experience, having served as President of Leasing at UTLX since January 2022. Her impressive 30-year career spans various business functions, including nearly two decades in GE Capital’s Intermodal and Railcar Leasing divisions, where she held the position of Chief Financial Officer.

Bill Constantino, who has had a successful 45-year career with the company, will retire in 2024. During his tenure, Constantino played a pivotal role in leading the business through multiple economic cycles and shaping the industry. His invaluable contributions and industry knowledge have been a cornerstone of Marmon Rail’s success.

Marmon Rail’s North American railcar leasing business combines the leasing units of Union Tank Car Company (UTLX) and Procor Limited. These two entities are North America’s premier designers, builders, and full-service lessors of railroad tank cars and specialized railcars. UTLX and Procor jointly own a fleet of approximately 120,000 railcars, serving customers in industries such as chemicals, petrochemicals, energy, and agriculture/food. UTLX manufactures tank cars in the United States and, in collaboration with Procor, provides railcar maintenance services at over 100 locations across North America.

Both UTLX and Procor are integral parts of Marmon Holdings, Inc., a Berkshire Hathaway company.

© 2023 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Precision Castparts

Berkshire’s Precision Castparts Soars in 2023 With Rising Revenues

Precision Castparts Corporation (PCC), a subsidiary of Berkshire Hathaway, reported robust financial results for the third quarter and the first nine months of 2023.

Revenues reached $2.3 billion in the third quarter and a cumulative $6.9 billion in the first three quarters of the year. These figures represent an outstanding 21.4% growth in the third quarter and an even more remarkable 26.0% surge in the first nine months compared to the previous year.

The company’s pre-tax earnings grew 43.1% in the third quarter and 32.5% in the first nine months of 2023 compared to 2022. The strong results in 2023 were attributed to increases in sales and improved manufacturing and operating efficiencies.

In 2023, the company experienced higher demand for aerospace products, which formed the primary driver behind the impressive revenue increases. However, it’s worth noting that PCC’s diverse product portfolio, which includes power/energy and general and industrial products, also made substantial contributions to the overall financial success.

The aviation and aerospace industry has consistently shown resilience and robust growth, even amidst global challenges. The long-term industry forecasts underscore the promising outlook, predicting sustained expansion and a continued surge in demand for air travel and aerospace products.

As the world gradually rebounds from the challenges of the past couple of years, the appetite for aerospace innovations and travel experiences remains strong.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Financials

Berkshire Hathaway Continued Stock Buybacks & Posts Robust Earnings in Q3 2023

(BRK.A), (BRK.B)

Berkshire Hathaway has continued its stock buybacks in the third quarter of 2023, reporting that “approximately $1.1 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $7.0 billion. On September 30, 2023 there were 1,445,546 Class A equivalent shares outstanding.”

The conglomerate reported strong operating earnings in Q3 of $10.761 Billion as compared to $7.651 billion in Q3 2022. Operating earnings for the first nine months were a robust $28.869 billion as compared to $24.228 in the first nine months of 2022.

Despite recent acquisitions of Allegany Corp., the controlling interest in Pilot Corp., and buying Dominion Energy’s 50% limited partnership stake in the Cove Point LNG facility, Berkshire’s cash reserves has continued to grow, reaching $157 billion.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkshire Hathaway Specialty Insurance

BHSI Appoints Jaghbir as Underwriting Manager, Queensland

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has upped Sami Jaghbir to Underwriting Manager, Queensland.

“Sami joined BHSI in 2015 to help establish our Brisbane office. He was pivotal in building our Executive and Professional Lines business in Queensland and more recently has led our Commercial Directors & Officers product line in New South Wales,” said Mark Lingafelter, President of Australasia, BHSI. “I am excited to work with Sami and our Brisbane team to bring the strengths of BHSI to our customers and brokers in Queensland. Sami’s professionalism, strong working relationships and collaborative style will help BHSI further develop our market presence across all of our product lines.”

Sami has more than 18 years of insurance industry experience specializing in E&P lines. In his new role he will be based in Brisbane.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Brooks

Berkshire Hathaway’s Brooks Running Thrives in Competitive Market, Anticipates Double-Digit Growth in 2024

(BRK.A), (BRK.B)

Berkshire Hathaway’s Brooks Running has experienced remarkable success in 2023, with a 5% increase in global revenue and a 7% rise in North American revenue year-to-date.

The company’s achievements can be attributed to various factors, including its expansion into new markets, recovery from supply chain disruptions caused by the COVID-19 pandemic, and the normalization of inventory levels amidst economic challenges. Furthermore, the return of Brooks’ full product line and innovation pipeline, along with the exceptional launch of the Ghost Max shoe in late September, have been instrumental in driving the brand’s growth and instilling confidence in its ability to achieve double-digit growth in 2024.

Leading the Market

Brooks Running has continued to dominate the adult performance running footwear market in the United States. For the seventh consecutive quarter, the brand has held the number one spot with a 21.4% market share. According to the Running USA 2023 Global Running Survey, released recently, Brooks was also identified as the most preferred brand for training and racing footwear by event participants.

Jim Weber, CEO of Brooks Running, expressed his satisfaction with the brand’s success, saying, “Brooks is winning with runners in an incredibly competitive marketplace. They are more discerning than ever and need their gear to deliver mile after mile. At the same time, we’re extending our reach to active people walking, hiking, or in the gym – because everyone can benefit from the fit, comfort, and performance Brooks’ products provide.”

Innovative Product Lineup

A key driver of Brooks’ momentum has been the introduction of new products into the market. Notably, the launch of the Ghost Max in late September marked a significant expansion of the highly successful Ghost franchise. This new shoe incorporates high-stack cushioning and GlideRoll rocker technology, providing enhanced protection and assisted transitions through the gait cycle. Ghost Max has achieved unprecedented retail adoption and contributed to Brooks’ dominance in the running footwear market. With the introduction of Ghost Max, Brooks now boasts five of the top 10 selling running footwear franchises in the U.S. specialty run channel.

Looking ahead to 2024, Brooks plans to introduce the Glycerin 21, the next generation of the fan-favorite Glycerin franchise, featuring additional DNA LOFT v3 cushioning. In addition, Brooks will launch the athlete-tested Hyperion Elite 4 distance racing shoe ahead of the 2024 U.S. Olympic Marathon Team Trials in February. The brand has also announced the Exhilarate-BL featuring Brooks’ cutting-edge 3D-printed 3DNA midsole technology, available to members of the Brooks Run Club in early 2024.

Omnichannel Growth and International Expansion

Brooks has not only excelled in the United States but also achieved significant growth in international markets. The company’s direct-to-consumer business saw a 25% increase in e-commerce sales in the U.S., while international revenue increased by 22% in France and the United Kingdom, combined, year to date. In addition, Brooks has made notable gains in the Chinese market, a testament to its ongoing regional and omnichannel growth efforts.

To engage with the community and promote its products, Brooks launched a pop-up store in Los Angeles in August. The store offered a dynamic shopping experience and hosted weekly community and fitness programming. Furthermore, Brooks has expanded its distribution capabilities by tripling its distribution facility footprint in the U.S. and U.K., enabling the company to meet the increasing demand across various sales channels.

Supporting Athletes and Global Running Community

Brooks remains committed to supporting athletes on the world stage. The brand’s track and middle-distance athlete, Josh Kerr, achieved a gold medal in the men’s 1500m at the World Athletics Championships in Budapest, and Des Linden secured the American Masters Record at the Chicago Marathon. Additionally, Brooks has expanded its roster of elite athletes by sponsoring marathoner Susanna Sullivan and signing 800m runner Brandon Miller to its Beasts middle-distance team. The brand has also formed an NIL (Name, Image, Likeness) deal with University of Arkansas freshman Shawnti Jackson, who holds the title of the fastest American high school female of all time.

Brooks has also fostered strong relationships within the digital run communities by collaborating with fitness apps such as Strava and Joyrun. Brooks became the first title sponsor of Strava’s Global 5K Monthly Challenge, attracting 3.1 million participants and growing its Brooks Run Club on Strava by 71.6%. The partnership with Joyrun, boasting 128 million users, extends Brooks’ reach and audience engagement throughout China.

Conclusion

As 2023 draws to a close, Brooks Running has demonstrated its resilience and innovation in the competitive athletic footwear industry. With a strong lineup of products, impressive market share, and expanding international presence, the brand is well-positioned for continued success in 2024 and beyond. Brooks’ dedication to athletes, the running community, and its customers has solidified its reputation as a leader in the global running industry.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Lubrizol

Lubrizol Partners with IMCD Group to Serve Bangladesh’s Growing Lubricant Market

(BRK.A) (BRK.B)

Berkshire Hathaway’s Lubrizol Corporation, a prominent player in the specialty chemicals and additives industry, has taken a significant step to bolster its presence in the flourishing lubricant and fuel additives market in Bangladesh. The company recently unveiled a strategic distribution agreement with IMCD Group, a globally recognized distributor and formulator of specialty chemicals and ingredients.

Under this new collaboration, IMCD will assume the role of distributing Lubrizol’s cutting-edge technology to an expanding customer base in Bangladesh. This initiative is designed to empower local customers in the formulation of high-performance finished fluids and lubricants, catering to the nation’s growing demand for quality lubricants. It is projected that the finished lubricant market in Bangladesh will experience a Compound Annual Growth Rate (CAGR) of 3-5%.

Lubrizol’s commitment to this endeavor is underscored by Flavio Kliger, Senior Vice President and President of Lubrizol Additives, who stated, “We see tremendous growth potential in South Asia, and that’s why we are investing in the region and committing to fully supporting oil marketers in Bangladesh. This new agreement with IMCD will allow us to reliably service the growing number of additives customers in the country with our high-performance technology.”

The increased need for lubricants and finished fluids in South Asia is being primarily driven by rapid urbanization and industrialization across the region. With growing vehicle fleets and evolving industrial requirements, the demand for high-performance lubricants, fuels, and fluids is on the rise.

Sanjeev Kaul, Vice President of India, Middle East, and Africa for Lubrizol Additives, emphasized the importance of this move, stating, “Bangladesh is an evolving marketplace and requires our dedicated support. Together with IMCD, we are fully equipped to provide that support to a growing customer base.”

This partnership between Lubrizol and IMCD is not their first collaboration. They have previously worked together to distribute additives in various global markets. Their shared successes in India and Africa have played a significant role in expanding their cooperation to Bangladesh.

Narendra Varde, Managing Director of IMCD India & Bangladesh, expressed his enthusiasm, saying, “Lubrizol has been our partner in India for the past four years, and we are now excited to strengthen this relationship by expanding into Bangladesh. With our proven track record of successfully nurturing and expanding businesses in India, bolstered by Lubrizol’s cutting-edge technology and unwavering support from their dedicated team, we are confident in our ability to replicate the success in this region. This collaboration will result in a higher level of service and support for Bangladesh oil marketers looking to distinguish themselves from competitors.”

Flavio Kliger further emphasized their commitment to high-growth markets in the Asia-Pacific region, noting that “Our ongoing relationship with IMCD is proof positive of our investment in high-growth markets, and we’re excited for a mutually successful future.”

Kailash Sawant, Director of Sales for India and South Asia at Lubrizol Additives, underlined the importance of delivering an exceptional customer experience, stating, “We have selected IMCD as our new route to market to cater to Bangladesh customers and enable improved services to every single customer.”

With this strategic partnership, Lubrizol and IMCD are poised to make significant contributions to Bangladesh’s lubricant and fuel additives industry, leveraging their expertise and cutting-edge technology to meet the evolving needs of the market and contribute to the nation’s economic growth.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Minority Stock Positions

Berkshire Hathaway Dives into Diageo: A New Addition to the Portfolio

(BRK.A) (BRK.B)

Berkshire Hathaway, the conglomerate led by Warren Buffett, has added Diageo plc to its ever-expanding portfolio. Diageo, a renowned liquor purveyor, boasts a vast array of over 200 brands, with a global presence in more than 180 countries.

In a recent filing with the U.S. Securities and Exchange Commission (SEC), Berkshire disclosed its acquisition of 227,750 shares of Diageo. This investment represents a relatively modest 0.04% ownership stake in the company, but it signifies Berkshire’s interest in the liquor giant.

Diageo, a name synonymous with top-quality beverages, offers a stellar lineup of best-selling brands, including the iconic Johnnie Walker Scotch whisky, Tanqueray gin, Smirnoff vodka, Guinness stout, and Baileys cream liqueur. These brands have long been favorites among consumers and have played a significant role in establishing Diageo as a leading player in the spirits industry.

Notably, Diageo has set ambitious goals for the future. Currently holding a 4.7% share of the global Total Beverage Alcohol (TBA) market, the company has its sights set on increasing that value share to an impressive 6% by the year 2030. This aspiration reflects Diageo’s commitment to growth and innovation within the dynamic world of beverages.

Moreover, Diageo recently announced a share buy-back program, demonstrating their dedication to creating value for their shareholders. This program aims to return up to $1.0 billion of capital to investors and is scheduled to be completed before June 26, 2024. The buy-back follows the successful completion of Diageo’s return of capital program during the second half of fiscal 2023, in which £0.5 billion of capital was returned to shareholders.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: Beware Projecting High Growth Rates for an Extended Time

Warren Buffett points out that no matter how successful a company is, and how good its future prospects look to be, you can get into a lot of trouble as an investor projecting too high a future growth rate for an extended period of time. “There are a lot of managements around who like to think their stocks are worth infinity, but we haven’t found one yet,” Buffett wryly notes.

“The idea of projecting out extremely high growth rates for very long periods of time has caused investors to lose, you know, very, very large sums of money,” Warren Buffett pointed out at the 2004 Berkshire Hathaway Annual Meeting. “There aren’t many companies, just take a look at the Fortune 500, go back 50 years… and look at the companies that were there and how many have really maintained rates much above 10 percent. It’s not an easy hurdle. And when you get up to 15, you know, you’re in the atmosphere and rarified atmosphere…There’s a real danger in projecting out high growth rates. And Charlie and I will very seldom, virtually never, get up into high digits. You can lose a lot of money doing that.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.