Buffett’s Berkshire Hathaway reports record profit (Financial Times)
Warren Buffett’s Berkshire Hathaway recorded its best ever quarterly profit in the third quarter, as earnings were boosted by a one-off $4.4bn gain from the merger of Kraft and Heinz.
Net income climbed to a record $9.43bn from $4.62bn a year earlier, the Omaha, Nebraska-based conglomerate said on Friday. Operating earnings, which exclude some investment results, came to $4.55bn for the period, narrowly beating the $4.47bn average estimate of three analysts surveyed by Bloomberg. [...]
Kraft Heinz gain leads ‘mediocre’ Berkshire Hathaway earnings (Omaha World Herald)
“I was looking for sort of a mediocre quarter, and that’s kind of what we got,” said Cathy Seifert, an analyst with S&P Capital IQ. She had predicted operating earnings per share slightly lower than Friday’s report.
Seifert said Berkshire’s results from reinsurance — taking on risk from other insurance companies in return for payments — seem to have declined too sharply.
“I think an argument can be made that some of this may be them intentionally stepping away from the insurance business, but the top-line is a little disturbing,” she said. Revenue from Berkshire’s reinsurance division dropped 48 percent to $2.4 billion compared with a year ago.
She said the company’s energy, industrial and railroad operations were “a little better than I had thought,” with flat revenues even though other companies in the same businesses have been reporting declining revenue.
Consumer-oriented businesses were “OK,” she said.
Berkshire Hathaway Inks a Record Third Quarter (Fool)
Berkshire's quarterly results are notoriously volatile, the result of a 12-figure portfolio of publicly traded securities and stakes in insurance companies, which produce volatile earnings by their nature.
Its insurance companies produced underwriting profit of $414 million, compared to an underwriting loss of $38 million last quarter, and profit of $629 million a year ago. [...] The insurance companies earned $840 million from investments this quarter, up from $811 million in the same quarter last year. The insurance float grew to $86.2 billion, up from $83 billion during the year-ago period. [...]
The railroad produced net income of $1.16 billion, an improvement over last year's earnings of $1.04 billion. BNSF reported that lower oil and coal prices have negatively affected its volumes, which grew only 1% year to date, but were offset by lower fuel prices and an increase in agricultural car loads. [...]
Berkshire's utility businesses steamed ahead. The company reported quarterly net earnings of $786 million from energy, up from $697 million in the year ago period. [...]
An assortment of smaller businesses, from its real estate brokerage to Clayton Homes, made up 43% of Berkshire's operating income. There was a slight year-over-year decline in the other operating companies' profitability, with combined earnings falling to $1.48 billion this quarter from $1.5 billion last year.
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