Buffett's Holding Company Reports Lower Profit For 3rd Quarter

Warren Buffett’s company reported a third-quarter profit that was roughly one-third the amount of last year’s because of much smaller paper gains on the value of its investments, but most of its businesses continue to recover from the effects of the pandemic, Josh Funk reported for the Associated Press (AP).

Photo Insert: Warren Buffett

Berkshire Hathaway Inc. reported $10.3 billion net income, or $6,882 per Class A share, in the third quarter.

A year ago, it reported $30.1 billion, or $18,994 per Class A share, when it recorded a $24.8 billion paper gain on its investments. This year, Berkshire recorded only a $3.8 billion paper gain on its investments.

Buffett has long said Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely.

By that measure, Berkshire’s operating earnings grew by 18% to $6.47 billion, or $4,330.60 per Class A share, up from $5.48 billion, or $3,452.45 per Class A share, last year.

The four analysts surveyed by FactSet expected Berkshire to report operating earnings of $4,536.17 per Class A share. Berkshire said its revenue grew 12% in the quarter, to $70.6 billion.

Most of Berkshire’s eclectic assortment of more than 90 businesses — which includes BNSF railroad, several major utilities, a number of manufacturers as well as furniture, jewelry, and chocolate businesses — reported improved earnings this year even as they dealt with the ongoing supply chain delays that are weighing on the economy.

All of Berkshire’s non-insurance businesses reported $7.25 billion in operating earnings, up from $5.69 billion a year ago.

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