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For more than 50 years, Warren Buffett has assembled a true conglomerate that has its hands in everything from car insurance to railroads and triple-A batteries. Berkshire Hathaway's (NYSE:BRK.A)(NYSE:BRK.B) individual business units behave very differently, as some zig in quarters in which others zag. Here's a look into the company's upcoming third-quarter earnings report.

Separating signal from the noise

Second only to Buffett's tax returns, Berkshire Hathaway's stock portfolio got its fair share of attention in the third quarter. Berkshire's stake in Wells Fargo took the forefront, as the bank's recent scandal put Berkshire, which owns about 10% of of the bank, in the spotlight.

Buffett hasn't spoken about Wells Fargo, and said he won't do so until after the presidential election. But what comes of Wells Fargo is insignificant in the grand scheme of Berkshire's investment portfolio. Notably, Wells shares ended the quarter just about where they started, shedding less than 5% of their value after dividends in the third quarter.

To put that in perspective, Wells Fargo, which we've heard a lot about, dropped by about as much as Coca-Cola, another large Berkshire Hathaway holding, but one that we've heard very little about. Other large holdings including Kraft Heinz, IBM, and American Express more than made up for the problem child in Berkshire's stock portfolio. 

Operating businesses: Ups and downs

Berkshire's group of manufacturers, the biggest contributor to pre-tax operating earnings in the first half of the year, should continue to get a lift from the inclusion of Precision Castparts and Duracell in its quarterly results.

Remember that Precision Castparts and Duracell were officially added to the Berkshire family in late January and February of 2016, respectively, and thus the conglomerate's manufacturing earnings look especially impressive when compared with 2015 results that do not include the most recent additions. Excluding these two acquisitions, revenue and pre-tax earnings declined 1% and 4%, respectively, in the first six months of 2016. 

The second-largest contributor to pre-tax earnings, BNSF, likely received little reprieve from recent trends in the railroad industry this quarter. Low coal, oil, and gas prices are a drag on demand for rail transportation. In the first six months of 2016, BNSF's earnings were down about 22% compared with the year-ago period, held hostage by commodity prices and lower shipments. Publicly traded peers have already reported declining year-over-year earnings for the third quarter.

In insurance, investors will want to see GEICO's increased prices result in larger underwriting profits. After an increase in losses due to the elevated frequency and severity of losses in 2015, GEICO raised its rates to better align its pricing with expected losses. Berkshire provided a glimpse into the third quarter by pointing out that growth in new business at GEICO accelerated in June and continued into July, a hint that the third quarter could show larger gains in new policies. Berkshire's filings may also provide some estimate of its insurers' losses from Hurricane Matthew, which made landfall in the United States just eight days after the end of the quarter.

Berkshire's most important business

The most important business to Berkshire may be one that it doesn't own...yet. Berkshire ended the second quarter with nearly $73 billion of cash. Subtract the $20 billion Buffett prefers to keep on hand to backstop its insurers to find that Berkshire entered the third quarter with about $53 billion in firepower to make one or many big acquisitions.

Propped up by the consistent profitability of Berkshire's core business units, Buffett's "elephant gun" has a seemingly limitless supply of ammunition for firing at big acquisition targets. Any hint as to how Berkshire plans to allocate its excess cash is perhaps as important as reporting on many of the businesses that Berkshire already owns.

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