Berkshire Profit Rises On Investment Gains, Non-Insurance Businesses

(RTTNews) - Warren Buffett's Berkshire Hathaway (BRK-A) on Friday reported a sharp increase in second-quarter profit, aided by investment gains as well as earnings from its railroad, utilities, manufacturing and retail businesses.

The results come amid a pickup in the U.S. economy, continued strength in employment level, and increased consumer spending.

That augurs well for Buffett who has investments in a panoply of businesses across insurance, restaurants, furniture, clothing, candy companies, natural gas and railroad. Berkshire also holds significant stakes in blue chip companies.

For the second quarter, Omaha, Nebraska-based Berkshire posted quarterly net earnings to shareholders of $6.4 billion or $3,889 a share, compared with $4.5 billion or $2,763 a share last year.

Results for the quarter included net investment and derivative gains of $1.3 billion, compared with gains of $379 million a year ago.

Excluding items, operating earnings for the quarter were $4.3 billion or $2,634 a share, compared with $3.9 billion or $2,384 a share last year.

Revenue for the quarter climbed to $49.8 billion from $44.7 billion last year.

Earnings from the company's insurance underwriting businesses continued to be weak during the quarter, dropping to $411 million from $530 million last year.

Results were helped by contributions from other businesses. Earnings from railroad business climbed to $916 million from $884 million last year; utilities and energy businesses rose to $375 million from $279 million; manufacturing, service and retailing increased to $1.26 billion from $978 million; and finance and financial products climbed to $280 million from $231 million.

Buffett has been assiduously adding businesses to his huge portfolio. Last year, Berkshire's energy division acquired Nevada's largest electric utility for $5.6 billion. Buffett also partnered with 3G Capital to take ketchup maker HJ Heinz private. Berkshire also acquired AtlaLink, a unit of Canadian engineering and construction company SNC-Lavalin Group.

Since the beginning of the year, Berkshire's book value per Class A equivalent share has increased by 5.6 percent to $142,483.

Berkshire Class A shares closed Friday at $189,279.00, up $1,155.00 or 0.61%, on the NYSE.