Berkshire Hathaway profits pop 67% as insurance businesses boom

Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) released news on Saturday showing a 67% boost in quarterly operating profit, thanks to a rebound in insurance underwriting and strength in a number of other businesses on the back of an improving economy. 

The conglomerate, run by Warren Buffet, reported that its operating profit for the second quarter rose to US$6.89bn, or US$4,190 per Class A share, from US$4.12bn, or US$2,505 per share, a year earlier. The results beat analyst forecasts.

While net income nearly tripled, the Omaha, Nebraska-based company said that much of this reflected a new accounting rule that requires the company to report unrealized gains on its stock investments with earnings. The company stated that this rule can “be misleading to investors” and can distort results. 

Those changes added a $4.5bn gain in the quarter, helping to almost triple net income. Net income rose to US$12.01bn, or US$7,301 per Class A share, from $4.26bn, or $2,592 per share, a year earlier.

Buffet has called Berkshire’s insurance businesses, which range from auto insurer Geico to reinsurer Gen Re, an engine that has powered Berkshire growth. 

Story by ProactiveInvestors