Billionaire investor Warren Buffett’s Berkshire Hathaway Inc said second-quarter profit rose 25 percent on earnings from newly acquired manufacturing businesses and improved results at insurance operations.
Net income climbed to US$5 billion from US$4.01 billion a year earlier, the Omaha, Nebraska-based company said in a statement on Friday.
Operating earnings, which exclude some investment results, were US$2,803 per share, missing the average US$2,911 estimate of three analysts surveyed by Bloomberg.
Book value, a measure of assets minus liabilities, rose to US$160,009 per share at the end of June from US$157,369 three months earlier.
Berkshire’s businesses represent a cross-section of the economy and provide Buffett, 85, with a steady stream of cash for more investments. Since the start of the year, he has added to the company’s manufacturing operations, completing deals for battery maker Duracell and Precision Castparts Corp, a global supplier to the aerospace industry. Those businesses helped bolster results, as did a rebound at auto insurer Geico, even as earnings slumped at the company’s railroad and energy businesses.
Berkshire shares have climbed 10 percent this year to US$218,010 at 4pm in New York compared with the 6.8 percent gain in the S&P 500 Index. The statement was released after the close of regular trading.
It was a rough quarter for other large US property-and-casualty insurers. Hartford Financial Services Group Inc was hurt by an increase in claims costs for auto policies, while Travelers Cos said that wildfires in Canada and other natural disasters crimped earnings.
However, at Berkshire, the insurance businesses posted an underwriting gain of US$337 million, rebounding from a loss of US$38 million a year earlier. Pretax underwriting profit almost tripled at the Geico unit to US$150 million as the auto insurer added customers and increased rates.
Income from Berkshire’s manufacturing, service and retailing segment climbed 14 percent to US$1.49 billion, boosted by Precision and Duracell.
Other major manufacturing businesses — including chemical unit Lubrizol and toolmaker Iscar — posted a decline in profit.
Industrial products subsidiaries “may take additional cost containment actions in response to further slowdowns in customer demand,” Berkshire said in a regulatory filing.
Luxury aviation unit NetJets reported lower revenue.
Berkshire’s stock portfolio was valued at US$104.2 billion at the end of the second quarter, down from US$106.4 billion on March 31. Some of Buffett’s biggest holdings — including Wells Fargo & Co, American Express Co and Phillips 66 — declined in the quarter.
The cash pile climbed to US$72.7 billion as of June 30 from US$58.3 billion three months earlier, helped by Kraft Heinz’s redemption of preferred shares for about US$8.3 billion.
The extra funds add to Buffett’s resources for another major takeover.
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