Warren Buffett's Berkshire Hathaway reports 10% Rise in First Quarter Profit
First quarter profit for Warren Buffett's Berkshire Hathaway Inc has recorded jump of 10% and operating profits surpassed forecasts, thanks to railroad and insurance businesses and benefits derived from derivatives.
Omaha, Nebraska-based insurance and investment conglomerate reported rise in net income to $5.16 billion, or $3,143 per share, from $4.71 billion, or $2,862, a year earlier. Rise in quarterly operating profit accounted for 20% to $4.24 billion, or $2,583 per share, from $3.53 billion, or $2,149. Average expectation of analysts for operating profit was about $2,373 per share.
Rise in revenue was 7% to $48.64 billion. Buffet’s book value for share rose 0.5% from year-end to $146,963. Results have been termed strong by Cathy Seifert, an analyst at S&P Capital IQ. It was different from companies in sectors where Berkshire competes that have posted “middling” performance.
Results came a day ahead of Berkshire's annual meeting in Omaha, where 50th anniversary at Berkshire's helm is expected to be celebrated by shareholders.
Buffett and Berkshire Vice Chairman Charlie Munger will address concerns for five hours at the meeting, in which more than 40,000 shareholders are expected to be present. Berkshire now has more than 80 operating companies in the energy, food, industrial products, insurance, railroad and other sectors. It has risen significantly from once a struggling textile mill. It now owns more than $115 billion of stocks.
"It's good to see the railroad recovering. That's the most important driver here”, said Jeff Matthews, who runs the Ram Partners hedge fund in Naples, Florida, owns Berkshire shares in his own account.
Berkshire’s profit from derivatives was $857 million. The stronger US dollar also helped the company make profits by reducing liabilities under contracts denominated in foreign currencies.
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