Insurance dampens Berkshire results
NEBRASKA: Berkshire Hathaway Inc, the conglomerate run by billionaire investor Warren Buffett, reported a 27 per cent decline in first-quarter profit on Friday, and said a loss from insurance underwriting contributed to operating results that fell short of forecasts.
The results were released one day before Berkshire’s annual meeting in Omaha, Nebraska, where Buffett, 86, and Berkshire Vice Chairman Charlie Munger, 93, will answer five hours of questions from shareholders, journalists and analysts.
That meeting is the centrepiece of a festive weekend of events throughout Omaha expected to draw more than 37,000 shareholders.
Net income fell to $4.06 billion (£3.13 billion), or $2,469 per Class A share, from $5.59 billion, or $3,401, a year earlier, when Berkshire had a $1.9 billion gain from its swap of its Procter & Gamble Co stock for the Duracell battery business.
Quarterly operating profit, which excludes investment and derivative gains and losses, fell 5 per cent to a three-year low of $3.56 billion, or $2,163 per Class A share, from $3.74 billion, or $2,274.
Analysts on average expected operating profit of about $2,666 per Class A share, according to Thomson Reuters I/B/E/S.
Buffett believes Berkshire’s investment and derivative gains in any given quarter are often meaningless, but accounting rules require Berkshire to report them in its earnings statements.