Berkshire Hathaway profit surges

06 August, 2018, 18:26 | Author: Eric Barnett
  • Conference On Issues Affecting U.S. Capital Markets Competitiveness

Berkshire Hathaway Inc on Saturday reported a 67 percent increase in quarterly operating profit, as its insurance underwriting operations rebounded from a poor quarter and several business units benefited from economic growth and improving demand.

The conglomerate, run by Warren Buffet, reported that its operating profit for the second quarter rose to US$6.89bn, or US$4,190 per Class A share, from US$4.12bn, or US$2,505 per share, a year earlier.

Net income for Omaha, Nebraska-based Berkshire, including realized and unrealized gains and losses from investments, almost tripled to $12.01 billion, or $7,301 per Class A share, from $4.26 billion, or $2,592 per Class A share, a year earlier.

The firm beat Wall Street forecasts, with net profits for the first half of the year up 31pc to $10.9bn (£8.4bn), according to accounts filed yesterday. Underwriting profit at the Geico auto insurance unit more than quintupled, the BNSF railroad benefited from demand to ship consumer products, grain, petroleum and steel, and the Berkshire Hathaway Automotive car dealership financed more vehicle purchases.

Berkshire spent $US6.08 billion on equities in the June quarter.

Its railroad, utilities and energy business also made $1.9bn from $1.5bn a year ago.

And now that the tech giant is America's first trillion-dollar company, Berkshire Hathaway's 5% stake is worth almost $50 billion, according to a regulatory filing posted Saturday. Berkshire Hathaway Inc. Class B had a net margin of 16.88% and a return on equity of 4.91%.


Buffett wrote in a letter to shareholders earlier this year that the rule change would "severely distort" its net earnings, and cautioned investors to focus on the "truly important numbers that describe our operating performance".

Berkshire Hathaway Inc. owns more than 90 companies, including railroad, clothing, furniture and jewelry firms.

Berkshire said it has not bought back stock in 2018.

Class A shares closed Friday at $304,671.

Earnings from insurance underwriting reached $943m, up from a $22m loss a year ago.

BNSF railroad added $1.3 billion to Berkshire's profit, up from $958million previous year.

Meanwhile, tax credits for wind-powered electricity generation helped boost profit 14 percent at Berkshire Hathaway Energy.

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