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.

Categories
Mouser Electronics

Mouser Electronics Opens European Customer Service Center in Lithuania

(BRK.A), (BRK.B)

Berkshire Hathaway’s Mouser Electronics has announced the inauguration of its latest European Customer Service Center, located in Lithuania’s capital city, Vilnius. This strategic move is aimed at bolstering support for the burgeoning design activity in the region’s expanding tech ecosystem and established industries.

Mark Burr-Lonnon, Mouser’s Senior Vice President of Global Service and EMEA and APAC Business, expressed his enthusiasm, stating, “Our business across Europe continues to grow significantly – in 2022, we saw our European business surge by 30 percent. Lithuania is home to a burgeoning tech sector and ecosystem with an increasing amount of electronics design and manufacturing activity. We are proud to deliver localized services globally and are excited to support European design engineers and buyers with their purchases of the newest semiconductors and electronic components.”

Mouser Electronics provides specialized customer support in the customer’s local language, offered across its locations in Europe, the Americas, and the Asia/Pacific regions.

The newly established Customer Service Center in Lithuania is staffed with a dedicated team ready to provide personal assistance with orders and respond to customer inquiries, all in the local language, time zone, and currency. Notably, this center marks Mouser’s 11th office in the EMEA region, further expanding its footprint in the European market. Other European locations include Germany, the United Kingdom, France, Israel, Italy, Spain, The Netherlands, Poland, Sweden, and the Czech Republic.

Lithuania boasts the largest economy in the Baltic region, and its capital city, Vilnius, has garnered international recognition as a prime destination for investment. In 2021, Vilnius was listed among the top 25 global cities of the future by foreign investment company FDI Intelligence. The city is also witnessing remarkable developments, with a $110 million investment by Tech Zity to create a 55,000-square-meter tech campus. Once completed, this tech center will stand as the largest of its kind in all of Europe, further underscoring the region’s tech-driven growth and innovation.

Mouser Electronics’ latest European Customer Service Center in Lithuania signifies the company’s commitment to meeting the evolving needs of design engineers and buyers in the region, ensuring that they have easy access to the latest semiconductors and electronic components, all while benefiting from localized support. This expansion aligns with Mouser’s mission to empower innovation and provide exceptional service to its growing customer base in Europe and beyond.

© 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
Lubrizol

Lubrizol and Grasim Break Ground on World’s Largest CPVC Resin Plant, Boosting India’s Piping Industry

(BRK.A), (BRK.B)

In a significant development for the Indian piping industry, Berkshire Hathaway’s Lubrizol, a global leader in specialty chemicals, and Grasim Industries Limited, a flagship company of the Aditya Birla Group, have initiated the construction of the first phase of a massive 100,000 metric-ton CPVC resin plant in Vilayat, Gujarat, India.

This collaborative effort is poised to revolutionize CPVC production in the region, catering to the burgeoning demand for piping applications not only in India but also in neighboring countries such as Nepal, Bangladesh, and Indonesia.

The new CPVC resin plant, situated at Grasim Industries’ complex, is set to become the largest single-site facility for CPVC resin production globally. It is designed to address the escalating need for CPVC materials in India’s construction and plumbing sectors, ensuring a steady supply of high-quality, locally manufactured CPVC resin. The plant will be equipped with Lubrizol’s cutting-edge CPVC resin manufacturing technology and will leverage Grasim’s expertise in reliable manufacturing processes.

In addition to this groundbreaking project, Lubrizol is doubling its existing CPVC compound manufacturing capacity at its Dahej, Gujarat, India site. This expansion will see production capacity soar from 70,000 metric tons to an impressive 140,000 metric tons, solidifying Lubrizol’s position as the largest CPVC producer in the region. It also distinguishes Lubrizol as the sole company with end-to-end CPVC capabilities, enabling its partners to meet the projected 10-12% annual increase in CPVC demand within the Indian market. Furthermore, Lubrizol is planning to establish a research and development center at its Dahej site, catering to the rapidly evolving needs of the Indian market.

The initial phase of the Vilayat resin plant and the expansion at the Dahej facility are scheduled to be operational by early 2025. These projects are anticipated to create over 4,000 direct and indirect job opportunities, contributing significantly to the local economy. In addition, Lubrizol is taking steps to establish a Global Capability Center in India, aimed at supporting regional growth and fostering closer collaboration among employees in the region. Over the next year, Lubrizol plans to hire 150 to 200 new employees at this location, with plans to expand its workforce further in the coming years.

Scott Mold, General Manager of Lubrizol TempRite, expressed his pride in these milestones, emphasizing that Lubrizol’s investment in India is geared toward servicing and supporting the growing demand for CPVC materials, particularly for ensuring access to clean, safe drinking water. India represents a key market for Lubrizol’s global CPVC leadership ambitions.

Lubrizol has been a pioneer in introducing CPVC into the Indian market for the past 25 years, offering a substantial economic development opportunity for the region. Today, India stands as one of the largest consumers of CPVC, primarily for plumbing pipes and fittings, and the increasing demand for clean water in residential and commercial buildings is set to propel continued growth in this sector.

© 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

Categories
Minority Stock Positions

BYD’s DOLPHIN Wins Carbuyer.co.uk Top Honour

China’s fast-growing EV maker BYD, backed by Berkshire Hathaway, has been named Carbuyer.co.uk Best Small Electric Car and Carbuyer.co.uk Car of the Year in the 2024 Carbuyer New Car Awards.

The Carbuyer judges said:

Best Small Electric Car: BYD DOLPHIN

“Compact on the outside, capacious on the inside, the BYD DOLPHIN is efficient, good to drive, loaded with tech and, with the bigger of the two batteries, comes with a sensible real-world range. It might not be pocket change, but the BYD DOLPHIN costs a good chunk less than its mainstream rivals.”

Carbuyer Car Of The Year: BYD DOLPHIN

“It really is quite extraordinary how a brand you’ve probably never heard of – albeit one that sells millions of cars in its home market – can so drastically undercut the competition and still offer such a compelling package. The BYD DOLPHIN isn’t a cheap car, it’s a great-value car. There’s a difference.”

© 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.