Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Brookfield Asset Management Inc. (USA) (NYSE:BAM) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed kneejerk reaction that turns out to be exactly the wrong response to the news.
Brookfield Asset Management has had an impressive run of late, with the stock approaching all-time highs. Let’s take an early look at what’s been happening with Brookfield Asset Management over the past quarter and what we’re likely to see in its quarterly report on Friday.
Stats on Brookfield Asset Management
| Analyst EPS Estimate | $0.29 |
| Change From Year-Ago EPS | (66%) |
| Revenue Estimate | $4.58 billion |
| Change From Year-Ago Revenue | 11.2% |
| Earnings Beats in Past 4 Quarters | 3 |
Source: Yahoo! Finance.
Will Brookfield Asset Management keep climbing higher?
Analysts aren’t entirely convinced about Brookfield’s earnings potential, having reduced their estimates for the quarter by $0.03 per share over the past three months and dropping their 2013 EPS call by $0.15. That hasn’t done anything to hold the stock back, though, as Brookfield shares have jumped more than 13% just since mid-November.
Brookfield Asset Management is a giant in the property business. In addition to its own real estate portfolio, Brookfield also took a huge position in mall-REIT giant General Growth Properties Inc (NYSE:GGP) during the company’s bankruptcy, which has led to big gains for Brookfield as General Growth has recovered strongly in recent years. Brookfield still retains about 83 million warrants on General Growth shares, giving it the right to buy stock at less than half its current market price.
One promising alliance that Brookfield established during the quarter was with Berkshire Hathaway Inc. (NYSE:BRK.A) and its HomeServices unit. The deal combines the networks of Prudential Real Estate and Real Living Real Estate into a promising new franchise that leverages the Berkshire name for the benefit of both partners. Brookfield also bought a big stake in industrial-distribution company Verde Realty, spending $886 million to take an 81% position in the company and its exposure to property along the U.S.-Mexico border, and it partnered with Johnson Controls, Inc. (NYSE:JCI) to merge their property and facility services business in Australia and New Zealand, extending the existing relationship between the two companies in Canada.
In its earnings report, Brookfield needs to demonstrate that it’s taking full advantage of the rebound in the real estate market to justify its big share-price gains. With many real-estate-related plays also booming, though, Brookfield has plenty of potential to go still higher if it continues to make smart strategic moves. Also, be sure to watch for further news about its renewable power and infrastructure business, which has been relatively quiet recently but has huge promise for the future.
The article Brookfield Asset Management: An Early Earnings Look originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger owns shares of Berkshire Hathaway. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway.
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