Berkshire Hathaway profits tumble 77% for fourth straight decline

November 9, 2008 by · Leave a Comment
Filed under: Stock Market News 

Even the great Warren Buffett is not immune to this broad market decline.  In the press release, they cite the falling income from the insurance businesses.  They mention that the two hurricanes that hit the U.S., it generated claims of $1.05 billion dollars.  It also mentioned that it had a loss of $1.26 billion on derivative contracts as well.  Knowing Warren, he has found the undervalued and unpopular companies and he is building his position so that he will be in a solid position when our economy finally recovers.


Warren Buffett’s Berkshire Hathaway said on Friday third-quarter profit fell 77 percent, the fourth straight quarterly decline, hurt by weaker results from insurance underwriting and a big loss on derivatives contracts. 


Net income for the Omaha, Nebraska-based insurance and investment company declined to $1.06 billion, or $682 per Class A share, from $4.55 billion, or $2,942, a year earlier.


Operating profit fell 18 percent to $2.07 billion, or $1,335 per share, from $2.56 billion, or $1,655. It fell short of analysts’ average expectation for $1,429 per share, according to Reuters Estimates. Revenue fell 7 percent to $27.93 billion. Berkshire’s net worth nevertheless rose to $120.2 billion from $118 billion at the end of June.


“You can look at the results as a glass half-full or half- empty,” said Frank Betz, a principal at Carret/Zane Capital Management LLP in Warren, New Jersey, which owns Berkshire stock. “Earnings were down, but book value went up. Berkshire hasn’t been battered by extraordinary insurance claims and there’s nothing alarming in the results that’s tied to Berkshire’s exposure to the economy.”


Berkshire is a roughly $175 billion conglomerate that owns several dozen businesses in such areas as insurance, energy, housing, kitchen supplies, clothing and food.

Source: Reuters


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