Omaha, Neb. (TheStreet) -- Berkshire Hathaway(BRK.B) turned in its best quarter in three years as the U.S. economic bellwether saw a big recovery in its consumer-linked businesses.
It's not your grandfather-of-the-markets-Warren-Buffett's-insurance-driven company anymore, as businesses from just-acquired railroad Burlington Northern to jewelry makers and luxury jets tore past insurance operations in driving Berkshire Hathaway quarterly revenue.
Berkshire Hathaway revenue in the first quarter of 2010 spiked by 41% to $32 billion versus $22.8 billion in the first quarter of 2009.
Berkshire Hathaway operating earnings from non-insurance business were the big driver in the quarter, and the big signal of recovery in the U.S. economy. Non-insurance business accounted for more than $1 billion of Berkshire Hathaway operating earnings in the first quarter, up from $529 million in the first quarter 2009. Insurance income, on the other hand, only ticked up $24 million in the first quarter comparison, and insurance investment income was down versus the prior year.
The revenue figures eclipsed the $32.9 billion revenue in the first quarter 2007, when it was a huge gain in insurance premiums that drove Berkshire Hathaway's value higher.
Berkshire Hathaway book value, the measure that Warren Buffett considers as a key company growth indicator, increased by 5.8% to $89,374 for the Berkshire Hathaway A shares in the first quarter.
Railroad acquisition Burlington Northern added $2.1 billion in the first quarter, while the sales and service segment of Berkshire's wholly owned subsidiaries contributed $1.2 billion revenue higher than in the previous year.Buffett's big buying spree, which reached its zenith with the acquisition of Burlington Northern, and the diversification away from insurance, really showed through in the first-quarter performance. Insurance premium revenue fell to 23% of total revenue and the $7.4 billion in premium income in the first quarter was almost half the premium income level in the first quarter of 2007, the previous three-year high revenue mark.
Berkshire Hathaway Reinsurance saw its revenue drop by 32% to $2.1 billion.
In 1999, insurance premiums were more than half of Berkshire Hathaway revenue.
Floundering corporate jet fleet NetJets rebounded in the quarter, with earnings of $57 million, compared with a $96 million loss a year earlier. NetJets revenue was up 18%, a turnaround that Buffett had previewed at Berkshire Hathaway's recent annual meeting.
Berkshire Hathaway's gain of 4.5% on Monday morning in early trading matched the huge gains in the Dow and S&P 500 Index as the news out of Europe of a bailout package sent the markets to a historic open.
-- Reported by Eric Rosenbaum in New YorkDownload the 2009 Warren Buffett Letter & 2009 Annual Report to Berkshire Hathaway Shareholders
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