Berkshire Hathaway Inc said its first-quarter profit fell 64 percent because it recorded an unrealized US$1.6 billion pretax loss on its derivative contracts, and its insurance businesses generated lower profits.
On Friday, the company reported net income of US$940 million, or US$607 per share, in the quarter ended March 31.
That’s decreased significantly from the net income of US$2.6 billion that Berkshire generated a year ago.
Chairman and CEO Warren Buffett warned shareholders in his annual letter that the derivatives could make the company’s earnings volatile.
But he predicted that the derivatives would ultimately be profitable.
The four analysts surveyed by Thomson Financial expected earnings per share of US$1,476.99 on average.
Including the derivative losses, Berkshire’s net investment losses in the quarter totaled US$991 million.
A year ago, the Omaha-based company recorded a US$382 million investment gain.
Berkshire said that its operating earnings are a better measure of how the company is performing in any given period because those figures exclude derivatives and investment gains or losses.
Berkshire reported US$1.93 billion in operating earnings during the first quarter, which was down significantly from US$2.21 billion in operating earnings a year earlier.
Officials at Berkshire typically do not comment on quarterly earnings reports.
The first-quarter report was released just ahead of the company’s annual shareholders meeting, which was expected to attract more than 30,000 people yesterday.
Berkshire’s insurance group, which includes Geico, reinsurance giant General Re and several other firms, contributed US$181 million to net income from underwriting new policies.
A year ago, Berkshire’s insurance companies generated a US$601 million underwriting profit.
“Berkshire’s property and casualty reinsurance operations have benefited during the past two years from relatively low levels of catastrophic losses, which investors should not assume will recur in 2008,” Berkshire’s chief financial officer Marc Hamburg wrote in the quarterly report.
Berkshire generated US$25.2 billion in revenue during the first quarter, down from the US$32.9 billion it generated in last year’s first quarter.
Berkshire owns more than 60 subsidiaries that range from insurance to clothing, furniture, and candy companies, restaurants, natural gas and corporate jet firms.
Berkshire also has major investments in such companies as Coca-Cola Co, Anheuser-Busch Cos and Wells Fargo & Co.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS