looks towards photographers after lunch at the 26th annual
Allen & Co conference in Sun Valley, Idaho July 9, 2008.
REUTERS/Rick Wilking
Berkshire Hathaway Inc., A Warren Buffett's Investment Company, posted a fourth straight profit drop, the longest streak of quarterly declines in more than a decade, as hurricanes hurt returns at insurance operations and investments lost value.
Third-quarter net income decreased 77 percent to $1.06 billion, or $682 a share, from $4.55 billion, or $2,942, a year earlier, the Omaha, Nebraska-based company said yesterday. Further declines in debt and equity markets reduced shareholders equity, a measure of assets minus liabilities, by $9 billion in October, after the quarter ended.
Here are list of Berkshire’s losses and assets decline:
- Underwriting insurance fell 83 percent to $81 million amid the most costly hurricane season since the record storms of 2005.
- Profit from selling policies at car insurer Geico Corp. fell 27 percent to $246 million. Berkshire typically gets about half its revenue from insurance.
- Hurricanes Ike and Gustav cost insurers a combined $10 billion when they struck the Gulf Coast in September, according to preliminary data from Insurance Services Office Inc.
- Decreases in the value of some holdings and derivatives lowered earnings by $1.01 billion in the period ended Sept. 30, compared with a $1.99 billion gain in the year-earlier quarter when Berkshire booked profits from selling a stake in energy firm PetroChina Inc.
- Losses from derivatives result in part from accounting rules related to bets Buffett made on four stock indexes, including the Standard & Poor's 500. If the indexes fall below contractually agreed-upon levels at expiration dates beginning in 2019, Berkshire will lose the bets. Berkshire has collected $4.85 billion on the contracts and can profit from investing the funds, the firm said.
- Some of the firm's largest stock investments slumped. American Express Co. has plunged 51 percent this year and Coca-Cola Co. dropped 25 percent.
- The worst housing slump since the Great Depression hurt building-related units including Acme Brick, Benjamin Moore paints and Shaw Industries. Profit at Shaw, the world's largest carpet manufacturer, fell 61 percent to $49 million.
- Profit at furniture stores, jewelry shops and the candy business declined 67 percent to $11 million.
- Earnings from Berkshire's energy and utilities unit dropped 8.5 percent to $324 million.
Related Posts :
Sources :
- Bloomberg: Berkshire Hathaway Profit Falls 77% on Investments, Insurance, November 8, 2008 00:01 EST
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