Does Berkshire's Industrial Arm Boost its Manufacturing Strength?

Berkshire Hathaway’s BRK.B manufacturing operations are a vital pillar of its long-term growth strategy, contributing significantly to revenues, earnings stability and diversification. Spanning industrial, building and consumer products, these businesses operate in cyclical yet essential sectors, providing dependable cash flows that help offset fluctuations in financial markets and insurance results.

Among these, the industrial-products group includes businesses such as Precision Castparts Corp. (PCC), Lubrizol Corporation, IMC International Metalworking Companies (IMC), CTB International, LiquidPower Specialty Products and diversified conglomerate Marmon Group — covering specialty chemicals, aerospace and power-grade metal components, metal-cutting tools, and a broad array of industrial equipment and services. 

The Industrial-products sub-segment serves as a backbone for Berkshire’s manufacturing revenues and earnings, contributing approximately 46% to revenues and 50% to earnings. This sub-segment has also been delivering improvement in revenues and earnings, reflecting healthy margin resilience even amid cyclicality.

Industrial products provide strategic diversification and cyclical resilience to the Manufacturing division of Berkshire Hathaway. Products such as aerospace castings (PCC), specialty additives and lubricants (Lubrizol), and metal-cutting tools (IMC) cater to a wide variety of industries whose end markets tend to have long product cycles and high barriers to entry, and are neither cyclical nor seasonal. Demand for these industrial products is mostly immune to the vagaries of the economy, ensuring stable performance of this sub-segment. 

What About Competitors?

3M Company’s MMM business is being driven by the strong performance of its Safety and Industrial segment, supported by demand for roofing granules, adhesives and tapes. Additionally, the 3M Company benefits from its strength in the commercial aircraft and defense markets, with project wins boosting its Transportation and Electronics segment. 3M Company remains resilient.

Honeywell International Inc.’s HON market leadership, broad portfolio and strong dealer network give it a competitive edge in aerospace and industrial markets. While Honeywell International is pursuing a value-driven transformation strategy, it faces headwinds from industrial automation softness, high debt and escalating expenses.

BRK.B’s Price Performance

Shares of BRK.B have gained 10.7% year to date, outperforming the industry.

BRK.B’s Expensive Valuation 

BRK.B trades at a price-to-book value ratio of 1.55, above the industry average of 1.51. It carries a Value Score of D.

Estimate Movement for BRK.B 

The Zacks Consensus Estimate for BRK.B’s fourth-quarter 2025 EPS has moved 15.8% south over the past seven days, while that for first-quarter 2026 EPS has moved 12.3% north in the same period. The consensus estimate for full-year 2025 and 2026 EPS has witnessed no movement over the past seven days.
 

The consensus estimate for BRK.B’s 2025 and 2026 revenues indicates year-over-year increases, while the same for 2025 and 2026 EPS indicates a year-over-year decline.  

BRK.B stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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