Berkshire Hathaway Inc says second-quarter profit rose 25 per cent, helped by improved results from insurance underwriting and investments and the purchase of Precision Castparts Corp, Warren Buffett’s largest-ever acquisition. Other businesses, including the Geico auto insurer, fared better.
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Net income for the Omaha, Nebraska-based conglomerate rose to $5 billion, or $3,042 per Class A share, from $4.01 billion, or $2,442, a year earlier.
Analysts surveyed by Thomson Reuters had projected $2,910.8 a share in operating profit on $56.47 billion in revenue.
Total revenue for the second quarter rose to $54.46 billion from $51.37 billion in the same quarter previous year.
Since the beginning of the year, Berkshire’s equity has increased $7.5 billion and its book value per Class A equivalent share has increased by 2.9% to $160,009.
Insurance underwriting swung to a US$337 million profit from a year-earlier loss of US$38 million, helping boost overall insurance profit, including investments, 40 percent to US$1.32 billion.
Income from the manufacturing, service and retailing segment climbed 14 per cent to $US1.49 billion, boosted by Precision and Duracell. Pretax underwriting profit nearly tripled at the Geico unit to $US150 million as the auto insurer added customers and increased rates. It posted a US$184 million pretax underwriting gain, versus a US$411 million year-earlier loss.
Float, or the amount of insurance premiums collected before claims are paid and which help fund Berkshire’s growth, grew to $90 billion from $89 billion at the end of March.
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Berkshire’s businesses represent a cross-section of the economy and provide Buffett, 85, with a steady stream of cash for more investments.
