Berkshire Hathaway is a holding company owning subsidiaries engaged in a number of business activities, primarily insurance businesses conducted on both a primary basis and a reinsurance basis.
Berkshire Hathaway's Q1 profit more than doubles
Holding company Berkshire Hathaway (NYSE:BRK.A) said first-quarter profit more than doubled as its insurance units avoided major disaster losses and the paper value of its derivative contracts improved.
The company - led by legendary value investor Warren Buffett, dubbed "The Sage of Omaha" - generated $3.245 billion in net income, or $1,966 per share, up from last year's net income of $1.511 billion, or $917 per share.
Last year's results were hurt by $1.1 billion in insurance losses from the Japanese earthquake and tsunami, Australian floods and the New Zealand earthquake.
The overall results fell short of what the four analysts surveyed by FactSet expected. They had forecast Berkshire would report earnings per share of $2,297.50 on $39.154 billion in revenue.
Berkshire says revenue grew 13 percent to $38.1 billion from last year's $33.7 billion.
The group's insurance division, which includes Geico and General Reinsurance, contributed $54 million to the Omaha-based company's profits. That was much better than last year's $821 million loss, but slower than past years.
Two years ago, Berkshire reported a $226 million underwriting gain in the first quarter.
Berkshire said Geico's expenses grew as it began to comply with new accounting standards for certain policies and losses were
The Burlington Northern Santa Fe (BNSF) railroad contributed $701 million to Berkshire's net income, up from $607 million a year ago. BNSF hauled three percent more loads in the period than it did last year.
The railroad said growth in the number of consumer and industrial products it carried offset decreases in coal and agricultural goods.
Berkshire Hathaway's manufacturing, retail and service unit was boosted by earnings from specialty chemical maker Lubrizol, which contributed $854 million to net income.
Utility unit, MidAmerican Energy, added $338 million, up from last year's $301 million.
Berkshire estimated that its derivative contracts were worth $650 million at the end of the first quarter, ahead of last year
when they were worth $176 million. The swing in the value of Berkshire's derivatives contributed to an overall gain on investments and derivatives of $580 million.
A year ago, Berkshire recorded an $82 million loss on its investments and derivatives.
Berkshire Hathaway owns roughly 80 subsidiaries, including clothing, furniture and jewelry firms. Its insurance and utility businesses typically account for more than half of the company's net income.
It also has major investments in such companies as Coca-Cola Co. (NYSE:KO) and Wells Fargo & Co. (NYSE:WFC).