Berkshire Hathaway profit tumbles 77 percent
Friday third-quarter profit fell 77 percent, the fourth straight quarterly decline, hurt by weaker results from insurance underwriting and a big loss on derivatives contracts.
Net income for the Omaha, Nebraska-based insurance and investment company declined to $1.06 billion, or $682 per Class A share, from $4.55 billion, or $2,942, a year earlier.
Operating profit fell 18 percent to $2.07 billion, or $1,335 per share, from $2.56 billion, or $1,655. It fell short of analysts' average expectation for $1,429 per share, according to Reuters Estimates. Revenue fell 7 percent to $27.93 billion. Berkshire's net worth nevertheless rose to $120.2 billion from $118 billion at the end of June.
"You can look at the results as a glass half-full or half- empty," said Frank Betz, a principal at Carret/Zane Capital Management LLP in Warren, New Jersey, which owns Berkshire stock. "Earnings were down, but book value went up. Berkshire hasn't been battered by extraordinary insurance claims and there's nothing alarming in the results that's tied to Berkshire's exposure to the economy."
Berkshire is a roughly $175 billion conglomerate that owns several dozen businesses in such areas as insurance, energy, housing, kitchen supplies, clothing and food.
It also tries to invest in out-of-favor companies with strong earnings and management. Insurance typically generates half of results. Buffett is the second-richest American according to Forbes magazine and an economic adviser to President-elect Barack Obama.
sábado, 8 de noviembre de 2008
Berkshire Hathaway profit tumbles 77 percent
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Berkshire Hathaway profit tumbles 77 percent
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