Berkshire Hathaway posts profit rebound

Boosted by better performance in its insurance underwriting business and sizable profits from stock holdings now counted under a new accounting rule, Warren Buffett’s Berkshire Hathaway on Saturday reported a sharp rise in second-quarter earnings.

Buffett’s big conglomerate, which owns businesses ranging from insurers to railroads to retailers like Dairy Queen, reported net earnings of $12 billion in the April-through-June quarter. That profit was nearly triple last year’s results and marked a strong rebound from a rare loss of $1.1billion in the first three months of the year.

Berkshire’s earnings were once again influenced by an accounting change that requires it to include unrealized gains or losses from its nearly $180 billion stock portfolio.

Unlike the first quarter, when volatile markets caused Berkshire to reduce its overall earnings by $6.3 billion due to a decline in the value of its equity holdings, this quarter a better-performing stock market resulted in a $4.5 billion boost to its overall earnings.

Berkshire’s top holding is Apple, a company that this past week became the first publicly traded U.S. stock to surpass a market value of $1 trillion on the strength of its iPhone success. Other big stock holdings include Coca-Cola, Wells Fargo and American Express.

On an adjusted basis, which removes certain items like investment results, Berkshire posted earnings of $6.9 billion, up more than 67 percent from $4.1 billion in last year’s second quarter.

Revenues for the quarter were $62.2 billion, up nearly 9 percent from $57.3 billion in last year’s second quarter.

Buffett, 87, in the second-quarter earnings report, again stressed that investors should ignore the swings in its earnings due to volatile stock prices, and instead focus on the performance of the conglomerate’s businesses. Stock price fluctuations will “continue to cause significant volatility” in its quarterly results, he noted.