How Berkshire's Service Arm Drives Its Service and Retailing Business

Berkshire Hathaway’s BRK.B Service and Retailing operations are a vital pillar of its long-term growth strategy, contributing significantly to revenues, earnings stability and diversification. Spanning service, retaining, Pilot and McLane, 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 service group includes NetJets and FlightSafety (aviation services) and TTI, a distributor of electronics components. Others include quick service restaurants (Dairy Queen), leased transportation equipment (XTRA) and furniture (CORT), logistic service Charter Brokerage, electronic media Business Wire, construction management services IPS-Integrated Project Services and a television station in Miami, WPLG. 

The service sub-segment serves as an essential pillar for Berkshire’s service retailing revenues and earnings, contributing approximately 13-15% to revenues and about 48% to earnings. While this sub-segment witnesses fluctuation in earnings, revenues have been continually improving.

Service businesses thrive on recurring demand and long-term contracts, delivering predictable cash flows while strengthening customer relationships and building scale. At Berkshire, this scale, combined with permanent capital and decentralized management, creates a powerful flywheel: consistent service performance generates steady cash, supports reinvestment and disciplined acquisitions, and reinforces competitive advantages — making the Service and Retailing segment a resilient, long-term compounding engine within the broader portfolio.

What About Its Peers

Textron's TXT Aviation business unit is benefiting from improving commercial air passenger traffic. Strong fleet utilization, backed by improving commercial air travel, contributed to the revenue growth of Textron’s Aviation unit. Textron also enjoys solid demand for its defense products. 

Arrow Electronics ARW benefits from strong positioning in the AI and advanced computing infrastructure market, serving as a critical distribution partner for semiconductor manufacturers. Its diverse customer portfolio of over 200,000 clients across multiple industries provides revenue stability and reduces concentration risk. Arrow demonstrates impressive cash flow generation capabilities that provide fundamental value for shareholders while funding strategic investments.

BRK.B’s Price Performance

Shares of BRK.B have gained 12.6% in a year, outperforming the industry.

BRK.B’s Expensive Valuation

BRK.B trades at a price-to-book value ratio of 1.54, above the industry average of 1.49. It carries a Value Score of C.

No Estimate Movement for BRK.B

The Zacks Consensus Estimate for BRK.B’s fourth-quarter 2025 and first-quarter 2026 EPS witnessed no movement in the past seven days. The same holds true for 2025 and 2026 EPS estimates.
 

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research