Berkshire Profit Declines As Insurance Underwriting Falls

(RTTNews) - Berkshire Hathaway Inc (BRK.A, BRK.B) Friday reported a decline in first-quarter profit, hurt by lower earnings from its insurance underwriting and railroad businesses along with weak derivative gains, partly offset by growth at manufacturing and retail businesses as well as investment gains.

The results come just a day prior to Berkshire's annual shareholders meet, where investors throng to hear Warren Buffett speak of future plans and shed light on how businesses fared under its managers.

Berkshire reported first-quarter net earnings to shareholders of $4.7 billion or $2,862 per Class A equivalent share, compared with $4.9 billion or $2,977 per Class A equivalent share last year.

Results for the recent quarter included investment gains of $1.02 billion and derivative gains of $153 million, while it was $326 million and $784 million respectively in the prior year.

Excluding items, operating earnings for the quarter were at $3.53 billion or $2,149 per share, compared to $3.78 billion or $2,302 per share a year ago.

The Omaha, Nebraska-based company's revenue for the quarter climbed to $45.45 billion from $43.87 billion last year.

Earnings from the company's insurance underwriting businesses for the quarter were at $461 million, compared with $901 million last year. Insurance investment income slid to $720 billion from $799 billion a year ago.

Earnings from the company's railroad business dropped to $724 million from $798 million last year.

Earnings from utilities and energy businesses for the quarter climbed to $452 million from $394 million, and manufacturing, service and retailing to $933 million from $862 million. Earnings from finance and financial products grew to $238 million from $191 million.

Berkshire overall has benefited from its investments in a range of businesses amid some pickup in the U.S. economy. This comes at a time the Fed has been gradually and systematically reducing its stimulus program, with consumer spending and housing recovery quite strong.

Among deal of interest, Berkshire, on Thursday, agreed to acquire AtlaLink, a unit of Canadian engineering and construction company SNC-Lavalin Group Inc (SNC.TO), for $2.9 billion.

Calgary, Alberta-based AltaLink, a indirect, wholly-owned unit of SNC-Lavalin, is Alberta's largest regulated electricity transmission-only business with assets including 280 substations and about 12,000 kilometers of transmission lines, serving 3 million Albertans.

Buffett has run Berkshire for nearly five decades and owns owns more than $40 billion of stock in the company, which has interests across insurance, restaurants, furniture, clothing, candy companies, natural gas and railroad . Berkshire also holds significant stakes in top notch companies.

At the end of the quarter, Berkshire had book value of $138,426 per share, compared with $134,973 per share a year ago.

Berkshire's Class A shares closed Friday at $192,255, down $1,173 or 0.61%.

The company's Class B shares closed at $128.09, down $0.97 or 0.75%. In after hours, this stock gained $0.28 or 0.22%.