What will diluted net earnings per share (US$) be for Fairfax in Q2-2025?

[Viking]

Q2-2025 is shaping up to be a very good quarter for Fairfax. So let's use this as an opportunity to have a little fun. Let's see how smart the mob at 'Corner of Berkshire and Fairfax' really is. Are we a bunch of cheerleaders? Or are we living in the real world? We will have our answer after Fairfax reports results (well, at least another data point).

 

So please make your thoughts known. Vote. And if you have thick skin, in the comment section, let us know:

• What diluted EPS range did you pick? 
• What do you see as the key 3 or 4 drivers of earnings in Q2 (be as specific as possible).
• What are 2 or 3 things you are watching most closely when Fairfax reports (want to learn)? 

 

After Fairfax reports results, we will crown the winners (those board members who picked the correct range). I am most interested in seeing how the average compares to what Fairfax actually reports. 

 

Can someone also post what current analyst expectations are for diluted EPS for Fairfax for Q2?

 

I will chime in with my thoughts in about a week. I want others to have a chance to get this party started  

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Note:

• Of course, this does not include the change in 'excess of FV over CV' for associate and consolidated holdings. This is significant economic value that is building at Fairfax that is not being captured in accounting results.

Edited July 21, 2025 by Viking

[SafetyinNumbers]

11 minutes ago, Viking said:

Q2-2025 is shaping up to be a very good quarter for Fairfax. So let's use this as an opportunity to have a little fun. Let's see how smart the mob at 'Corner of Berkshire and Fairfax' really is. Are we a bunch of cheerleaders? Or are we living in the real world? We will have our answer after Fairfax reports results (well, at least another data point).

 

So please make your thoughts known. Vote. And if you have thick skin, in the comment section, let us know:

• What diluted EPS range did you pick? 
• What do you see as the key 3 or 4 drivers of earnings in Q2 (be as specific as possible).
• What are 2 or 3 things you are watching most closely when Fairfax reports (want to learn)? 

 

After Fairfax reports results, we will crown the winners (those board members who picked the correct range). I am most interested in seeing how the average compares to what Fairfax actually reports. 

 

Can someone also post what current analyst expectations are for diluted EPS for Fairfax for Q2?

 

I will chime in with my thoughts in about a week. I want others to have a chance to get this party started  

----------

Note:

• Of course, this does not include the change in 'excess of FV over CV' for associate and consolidated holdings. This is significant economic value that is building at Fairfax that is not being captured in accounting results.

Here is the consensus and the last 5 years of quarterly EPS for context.

 

 

[Hoodlum]

What I have seen from other peer reporting so far is that earnings are noticeably beating Analyst projections.  It would seem much of this is due to much fewer claims than usual during Q2.  This along with some Mark to Market realized gains and higher than expected reserve releases will get us to the $50-$59 range.  I don't believe we will see much in the way of earning gains from bonds this qtr.  But I would certainly not be disappointed with $60+.

 

WR Berkely is reporting after hours today, so we will have another peer for comparison.

I am curious to see how the reserve releases are trending and if the foreign currency exchange rate gain this qtr is close to adding $20 to book.  I am also interested to see how much of the TRS they closed off (shares bought back) at end of Q2.

Edited July 21, 2025 by Hoodlum

[dartmonkey]

Pretty amazing that analysts are projecting $40-$50 in quarterly earnings for each of the next 4 quarters, mid-point $177.25 for the 4 quarters combined, and so at the current share price of $1788 this represents almost exactly 10x forward earnings, in a market where the S&P 500 P/E for forward earnings for the same periods is 25. And I believe that is with undiluted EPS (https://ycharts.com/indicators/sp_500_pe_ratio_forward_estimate), so the ratio with diluted EPS for the S&P would be higher still. 

 

I don't have a model, but based on the fact that recent quarters have had earnings (diluted EPS) between $37 and $50, despite currency headwinds, and this quarter we have currency tailwinds, no known major catastrophes, and big gains from the minority mark to market equity holdings, I am going to guess we are at $50 to $55 diluted EPS for Q2.  

[Santayana]

Little surprising to see multiple votes for over $100!  Maybe I'm underestimating the Eurobank impact.

[nwoodman]

29 minutes ago, Hoodlum said:

What I have seen from other peer reporting so far is that earnings are noticeably beating Analyst projections.  It would seem much of this is due to much fewer claims than usual during Q2.  This along with some Mark to Market realized gains and higher than expected reserve releases will get us to the $50-$59 range.  I don't believe we will see much in the way of earning gains from bonds this qtr.  But I would certainly not be disappointed with $60+.

 

WR Berkely is reporting after hours today, so we will have another peer for comparison.

I am curious to see how the reserve releases are trending and if the foreign currency exchange rate gain this qtr is close to adding $20 to book.  I am also interested to see how much of the TRS they closed off (shares bought back) at end of Q2.

+1 that was my pick too. I think I have a better chance at predicting book value in 5 years time than any particular quarterly result but a useful exercise nonetheless. 
 

Rotated half my Eurobank into Fairfax a few days ago. Still think there is decent upside in Eurobank but like Fairfax’s prospects longer term (decades).  Div tax and margin requirements were considerations too.

[TwoCitiesCapital]

Short-term treasuries were modestly lower, but wouldn't impact much on a price basis. So lets call it roughly the same $500 million in interest/dividends as Q1. 

Will take the same share in profits/associates of $70 million from Q1 as well. 

There will be another ~$630 million gain on the TRS held on their own shares.  

 

 

Just those 3 items get you to $50+. We didn't count insurance, any realized gains/losses from equity investments, any additional lookthrough income in associates, any improvements to interests earned from larger float, and no credit given to excess of carrying value adjustments for things like Eurobank. 

 

All total, on a look through basis, it's not hard to get to a scenario where Fairfax gets $100+/sh in economic earnings per share, but that won't be what is reported. 

[Parsad]

WRB had a terrific Q2 in underwriting...I would imagine the trend will look similar across the industry, including Fairfax.  Cheers!

 

https://finance.yahoo.com/news/w-r-berkley-corporation-reports-201100141.html

[Hoodlum]

2 hours ago, Santayana said:

Little surprising to see multiple votes for over $100!  Maybe I'm underestimating the Eurobank impact.

Maybe someone knows something that we don’t.  I would be fine with that but seems very unlikely.  That is double my estimate!

 

Edited July 21, 2025 by Hoodlum

[LC]

I'll take modest improvement over Q1. I voted 50-59 but I am thinking in the 45-55 range. High level guesstimates: 

 

Strong operating performance (taking the industry expectation of lower claims + still firmed pricing)

Decent gains in the equity portfolio

Share of associates probably middling

Fixed income portfolio probably not much change from Q1

Not sure how active they are on repurchases but probably slowing down?

[Hsmpanl]

3 hours ago, Parsad said:

WRB had a terrific Q2 in underwriting...I would imagine the trend will look similar across the industry, including Fairfax.  Cheers!

 

https://finance.yahoo.com/news/w-r-berkley-corporation-reports-201100141.html

Very interesting after hours reaction to a very strong quarter. Seems like people must be worried about something other than business results for the insurance sector. Anybody know something that I’m missing?

[Crip1]

I went with the $40 to $49 range. In terms of top things to look at:

 

* Combine ratio, and the impact reserve releases.

 

* Stock buybacks and or change in the TRS position. 

 

* New developments.

 

-Crip 

Edited July 22, 2025 by Crip1

[nwoodman]

39 minutes ago, Hsmpanl said:

Very interesting after hours reaction to a very strong quarter. Seems like people must be worried about something other than business results for the insurance sector. Anybody know something that I’m missing?

Each to their own, but I find it hard to get too excited about a ~20% ROE insurer at 2.8x’s book.  I think Bill agrees hence no buybacks in Q2 and returning capital via specials etc.  I think with WRB it is priced for much higher ROEs, hence the sell off.  Great company and Bill is a legend.  The obvious answer is to be using their shares as currency.

 

OTH an ~18% ROE insurer at 1.6x understated BV I think you can make a case for

[valueventures]

Could someone who selected more than $100 please explain their selection? Is this driven by the Eurobank impact? And is this referring to economic earnings per share?

[Malmqky]

I would imagine people who selected $100+ were thinking annually and not for the quarter.

[TwoCitiesCapital]

15 minutes ago, Malmqky said:

I would imagine people who selected $100+ were thinking annually and not for the quarter.

 

I don't think that's the case. I just think they're thinking of all of the components of gain that may not flow through to the income statement based on accounting conventions. 

 

With relatively easily forecasting and taking known-knowns, it's pretty easy to get to a base case of $75-100 of economic value added this quarter from interest, insurance, associates, and mark-to-market movements, but not all of those flow through the income statement which was my point above. Some pass through, some get added to the balance sheet, some don't get marked up at all but will be reflected in "fair value over carrying value" commentary, and some will be consolidated with the lookthru earnings being less than the gain in market value (which will be the case for Eurobank). 

 

I think economic growth/earnings will be in the ballpark of $100/sh. I think what actually gets reported on the income statement will be closer to $60-70 which is where my vote landed. 

Edited July 22, 2025 by TwoCitiesCapital

[wondering]

in keeping with the initial objective of Viking's to keep it fun (there is no way to be too exact about this).  In the last two fiscal years, the quarterly high point was 4th quarter 2023 of 52.87.  

 

I voted for 70-79/share.  My imprecise logic is that the share count was higher back then, and perhaps it wouldn't be unreasonable that earnings are 50% stronger this quarter due to low cat losses, favorable reserve developments, and improved evaluations of equity holdings.

 

We shall see...

[Hamburg Investor]

It should be the best quarter earnings wise in a while, so I voted for the maximum. Just a gut feeling, I don't do the math.

I don't think it'll be below 60$. Maybe in between.

But by voting above 100$ I have more outs than with voting 80 to 90 or 90 to 100: 101$, 111$, 121$, $131...  and so on...  

[SafetyinNumbers]

Scotia updated their estimate for Q3 this morning. 

 

[villainx]

6. Profit!

[Txvestor]

On 7/22/2025 at 3:22 PM, valueventures said:

Could someone who selected more than $100 please explain their selection? Is this driven by the Eurobank impact? And is this referring to economic earnings per share?

Well I'm not perfectly well versed with the accounting rules. But with the Total return swaps on their shares plus Eurobank and other smaller wins, the gain is approaching $2B which is close to $100 a share. 

[Hamburg Investor]

2 hours ago, Txvestor said:

Well I'm not perfectly well versed with the accounting rules. But with the Total return swaps on their shares plus Eurobank and other smaller wins, the gain is approaching $2B which is close to $100 a share. 

+1

 

I am not doing any quarterly maths, but that are the main reasons for me to answer „a whole lot“. I am anticipating a very good cr (might be wrong, just a guess.. No major catastrophes). And FFHs equity, Float etc. has grown, while shares have been reduced. So the earnings base is broader and the results are pinned on less shares. 
 

BVPS stands above 1.000 dollar. I assume above 20% roe at present. So around 60 dollar per quarter is my guess on average. Q2 should be better for the reasons outlined - so maybe 80, 90 or even more.

 

But that’s just a very rough guess.

[villainx]

 

On 7/22/2025 at 4:22 PM, valueventures said:

Could someone who selected more than $100 please explain their selection?

 

What about the the 30-39 pickers?

[Hoodlum]

On 7/21/2025 at 4:03 PM, Hoodlum said:

What I have seen from other peer reporting so far is that earnings are noticeably beating Analyst projections.  It would seem much of this is due to much fewer claims than usual during Q2.  This along with some Mark to Market realized gains and higher than expected reserve releases will get us to the $50-$59 range.  I don't believe we will see much in the way of earning gains from bonds this qtr.  But I would certainly not be disappointed with $60+.

 

WR Berkely is reporting after hours today, so we will have another peer for comparison.

I am curious to see how the reserve releases are trending and if the foreign currency exchange rate gain this qtr is close to adding $20 to book.  I am also interested to see how much of the TRS they closed off (shares bought back) at end of Q2.

 

One other item I will watch for is the amount of Holding Company cash/short-term securities.  In Q2 2024 it was $2.5B, but at the end of Q1 2025 it had dropped to $2.1B.   I would like to see this at $3B+ at the end of Q2.

[Haryana]

Wild Estimates Breakdown (all in US$mm)

1. Consolidated Insurance = 500
2. Consolidated Non-insurance = 100
3. Interest and dividends = 600
4. Share of profit of associates = 200
5. Net gains on investments = 1000
6. Debt and Corporate Expenses = (300)
7. Income tax and minority = (300)

Net Earnings = 1800

 

-> Q2EPS = $90