Berkshire Hathaway Inc. (BRK.A; BRK.B) said Friday that it swung to a $3.6 billion first-quarter profit, helped by a huge one-time holding gain related to its acquisition of Burlington Northern Santa Fe as well as higher income from insurance underwriting and non-insurance businesses. The company's operating earnings per share breezed past Wall Street expectations.
The Omaha, Nebraska-based company reported net earnings for the first quarter of $3.63 billion or $2,272 per Class A share, compared to a net loss of $1.53 billion or $990 per Class A share for the year-ago quarter.
The latest quarter net income was Berkshire's fourth straight profit and its biggest since a $4.55 billion net income in the third quarter of 2007.
Berkshire had $1.41 billion of net gains from investments and derivatives in the first quarter, which included a one-time holding gain of $979 million related to the company's acquisition of Burlington Northern SantaFe
. In the first quarter of last year, the company recorded net investment and derivative losses of $3.24 billion.
Excluding investment and derivative gains and losses, operating earnings for the first quarter were $2.22 billion or $1,390 per Class A share, compared to $1.71 billion or $1,100 per Class A share in the prior year quarter.
On average, 4 analysts polled by Thomson Reuters expected the company to earn $1101.83 per Class A share for the first quarter. Analysts' estimates typically exclude special items.
Total revenue for the first quarter rose 41% to $32.04 billion from $22.78 billion in the same quarter last year.
On February 12, Berkshire completed the acquisition of 77.5% Burlington Northern Santa Fe that it did not already own for aggregate consideration of $26.5 billion that consisted of cash of about $15.9 billion with the remainder in Berkshire common stock. About 50% of the cash component was funded with existing cash balances and the remaining 50% was funded with proceeds from new debt issued by Berkshire.
Beginning as of that date, Burlington's results and net earnings are included fully in Berkshire's consolidated results and net earnings. Burlington contributed $2.07 billion in revenue and $282 million in net income to Berkshire's results for the 2010 first quarter.
Insurance underwriting generated operating earnings of $226 million in the first quarter, up 12% from $202 million in the same quarter last year. Berkshire's insurance group include GEICO and General Re among other
Insurance investment income for the quarter fell 8% to $988 million from $1.07 billion a year ago.
First quarter operating earnings from the company's non-insurance businesses nearly doubled to $1.05 billion from $529 million a year ago.
During the first quarter, the company's book value increased by 5.8% to $89374 per Class A equivalent share.
Berkshire, which is now a constituent of the S&P500 index, is a holding company owning subsidiaries that engage in a number of diverse business activities including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, services, retailing and railroad.
The company has over 80 units with businesses as varied as insurance, restaurants, furniture, clothing, candy companies, natural gas and corporate jet leasing.
Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders
The Omaha, Nebraska-based company reported net earnings for the first quarter of $3.63 billion or $2,272 per Class A share, compared to a net loss of $1.53 billion or $990 per Class A share for the year-ago quarter.
The latest quarter net income was Berkshire's fourth straight profit and its biggest since a $4.55 billion net income in the third quarter of 2007.
Berkshire had $1.41 billion of net gains from investments and derivatives in the first quarter, which included a one-time holding gain of $979 million related to the company's acquisition of Burlington Northern Santa
Excluding investment and derivative gains and losses, operating earnings for the first quarter were $2.22 billion or $1,390 per Class A share, compared to $1.71 billion or $1,100 per Class A share in the prior year quarter.
On average, 4 analysts polled by Thomson Reuters expected the company to earn $1101.83 per Class A share for the first quarter. Analysts' estimates typically exclude special items.
Total revenue for the first quarter rose 41% to $32.04 billion from $22.78 billion in the same quarter last year.
On February 12, Berkshire completed the acquisition of 77.5% Burlington Northern Santa Fe that it did not already own for aggregate consideration of $26.5 billion that consisted of cash of about $15.9 billion with the remainder in Berkshire common stock. About 50% of the cash component was funded with existing cash balances and the remaining 50% was funded with proceeds from new debt issued by Berkshire.
Beginning as of that date, Burlington's results and net earnings are included fully in Berkshire's consolidated results and net earnings. Burlington contributed $2.07 billion in revenue and $282 million in net income to Berkshire's results for the 2010 first quarter.
Insurance underwriting generated operating earnings of $226 million in the first quarter, up 12% from $202 million in the same quarter last year. Berkshire's insurance group include GEICO and General Re among other
Insurance investment income for the quarter fell 8% to $988 million from $1.07 billion a year ago.
First quarter operating earnings from the company's non-insurance businesses nearly doubled to $1.05 billion from $529 million a year ago.
During the first quarter, the company's book value increased by 5.8% to $89374 per Class A equivalent share.
Berkshire, which is now a constituent of the S&P
The company has over 80 units with businesses as varied as insurance, restaurants, furniture, clothing, candy companies, natural gas and corporate jet leasing.
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Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders
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