Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, on Saturday reported a 67 per cent increase in quarterly operating profit, as insurance underwriting rebounded and several businesses benefited from a growing economy and improving demand.
Results topped analyst forecasts, as underwriting profit at the Geico auto insurance unit more than quintupled, while earnings surged at the BNSF railroad and rose in Berkshire's service and retailing operations.
Net income, meanwhile, nearly tripled, though that reflected a new accounting rule requiring Berkshire to report unrealised gains on its stock investments with earnings. Mr Buffett says that rule distorts net results and can mislead investors.
Berkshire said second-quarter operating profit rose to $6.89 billion, or roughly $4,190 per Class A share, from $4.12bn, or $2,505 per share, a year earlier. Analysts on average expected operating profit of $3,387 per share, according to Thomson Reuters data.
What Warren Buffett is really telling investors in his latest letter
Get rich and retire early by investing like Warren Buffett
Finance guru Andrew Hallam’s new guide for expats wanting to become wealthy
Net income rose to $12.01bn, or $7,301 per Class A share, from $4.26bn, or $2,592 per share, a year earlier.
Book value per Class A share, which reflects assets minus liabilities and is a preferred measure of growth for Mr Buffett, rose 3 per cent from the end of March to $217,677.
Berkshire also ended June with $111.1bn of cash and equivalents, some of which Mr Buffett could use to repurchase stock under a new policy giving him, and Vice Chairman Charlie Munger, more freedom to conduct buybacks as big acquisitions have been hard to find.
Mr Buffett has made no major acquisitions for Berkshire since the $32.1bn purchase of aircraft parts maker Precision Castparts in January 2016.
He has spent some money on stocks, and Berkshire said it ended June with a $47.2bn stake in iPhone maker Apple.
The company said it has not bought back stock in 2018.
Class A shares of Berkshire closed Friday at $304,671, or 7 per cent below their January 29 peak, while Class B shares closed at $200.24, or 8 per cent below its peak on the same day.