Berkshire Hathaway says quarterly profit triples

The Associated Press

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OMAHA, Neb. | Warren Buffett’s company said Friday that its third-quarter profit tripled as the improving economy and stock market boosted the value of Berkshire Hathaway Inc.’s derivative contracts.

Berkshire said it generated $3.2 billion, or $2,087 per share, in net income. That’s up significantly from last year’s $1.1 billion, or $682 per share.

Most of the swing in earnings is related to an unrealized $1.7 billion gain on Berkshire’s derivatives, some of which are tied to credit defaults and some of which are tied to equity markets. That compares to a $1.3 billion loss on Berkshire’s derivatives in last year’s third quarter.

Excluding the investment and derivative gains, Berkshire’s operating earnings were nearly flat at $2.06 billion, or $1,325 per share. Last year, Berkshire reported operating earnings of $2.07 billion, or $1,335 per share.

The four analysts surveyed by Thomson Reuters expected Berkshire to report earnings per share of $1,308.25.

On Tuesday, Berkshire announced its biggest deal with a plan to acquire Burlington Northern Santa Fe Corp. for $26.3 billion. Berkshire already owns a 22 percent stake in Burlington Northern.

Operating profit in Berkshire’s insurance underwriting business, which includes Geico and General Reinsurance, soared to $363 million from $81 million a year ago thanks partly to this year’s relatively quiet hurricane season.

Posted on Fri, Nov. 06, 2009 11:15 PM

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