Berkshire Hathaway Inc said second-quarter profit rose 35 percent as its insurance units raised prices and had fewer claims.
The company is owned by Billionaire investor Warren Buffett.
Net income rose to US$1.05 billion, or US$681 a share, from US$773 million, or US$506, a year ago, the company said in a statement. Underwriting results improved in each of the insurance businesses as realized investment gains from selling securities fell 97 percent to US$13 million from US$420 million a year earlier.
Units General Reinsurance Corp, the third-largest reinsurer, and Geico Corp, the fourth-largest US car insurer, are benefiting from higher rates in the wake of the Sept. 11 terrorist attacks. The attacks generated US$58 billion in claims and cost Berkshire US$2.28 billion.
"Considering that there were no investment gains and it all came from operations, the results are terrific," said Keith Trauner, an analyst at Fairholme Capital Management, which manages US$750 million and owns 2,019 Berkshire shares.
Price increases since Sept. 11 will take about 15 months to be fully reflected in the company's earnings, Trauner said.
"Barring another mega catastrophe, Berkshire's insurance results should continue to improve over the next two years," he said.
Earnings excluding gains from sales of securities were US$1.03 billion, or US$673 a share, compared with US$353 million, or US$231, beating the US$550 average estimate of analysts surveyed by Thomson First Call.
Shares of Berkshire gained US$110 to US$71,000 Friday in New York Stock Exchange composite trading. They've fallen 6 percent this year as the Standard & Poor's 500 Index fell 21 percent.
"The stock has held up quite well," said Tom Davis, an analyst at Loomis Sayles & Co, which manages US$70 billion and owns 203 Berkshire shares. "If the insurance businesses continue to improve, there's considerable upside in the stock."
The Omaha, Nebraska-based company increased the cash it collects from insurance premiums and non-insurance revenue before claims and expenses to US$38.5 billion in the second quarter, up US$1.2 billion. That cash is the so-called "float" that Buffett uses to purchase securities and make acquisitions.
Buffett has said he's looking for acquisitions in the US$5 billion to US$20 billion range. He hasn't specified the companies he is targeting. Marc Hamburg, Berkshire's treasurer, couldn't immediately be reached to comment.
Losses from natural disasters were "light" in the second quarter, Davis said.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS