Earnings soar 35% at Berkshire Hathaway
Berkshire Hathaway, the holding company run by the billionaire US investor Warren Buffett, reported a 35 per cent rise in quarterly profits last night, as its insurance operations benefited from rising premiums.
Berkshire, whose insurance and reinsurance businesses provide money for Mr Buffett to invest, reported a net second-quarter profit of $1.0bn (£65m), or $681 a share. That compared with $773m, or $506 a share, the year before.
Excluding $13mgains from selling investments, Berkshire posted an operating profit of $673 a share, up from $231 a year ago and beating Wall Street's expectations of $550 a share.
The rise in profits came as insurance and reinsurance rates continue to soar, after a decade of declines. Price increases were only accelerated by a surge in demand for insurance and a tightening of supply after 11 September.
Mr Buffett, who has won a devoted following among retail investors with his policy of seeking out long-term "value" investments, has been taking advantage of the stock market falls to buy up assets from distressed telecoms and energy companies. This year he has spent $2.3bn on gas pipelines and invested more than $100m in the telecoms group Level 3.
Berkshire's Class A stock, which has not been split in Buffett's 37 years in charge, closed at $71,000 a share in New York. The stock has fallen 6 per cent this year, outperforming the S&P 500 index, which has fallen 21 per cent.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies