Billionaire Warren Buffett's Berkshire Hathaway Inc. (BRK.A; BRK.B) said Friday after the markets closed that its first quarter profit climbed 51% from last year, helped by significantly improved results at its insurance underwriting business as well as investment and derivative gains.
The company's operating earnings for the quarter, which excludes investment and derivative gains/losses, rose 42%.
First quarter operating earnings from the company's insurance underwriting businesses jumped to $901 million in the first quarter from $54 million in the prior year quarter. Berkshire's insurance group include GEICO and General Re among others.
Insurance investment income for the quarter grew 1% to $799 million from $791 million a year ago.
First quarter operating earnings from the company's non-insurance businesses increased 12.5% to $2.25 billion from $2.00 billion a year ago. Berkshire completed its acquisition of railroad operator Burlington Northern Santa Fe in February 2010 and lubricant maker Lubrizol Corp. in September 2011.
The Omaha, Nebraska-based company reported net earnings for the first quarter of $4.89 billion or $2,977 per Class A equivalent share, compared to $3.25 billion or $1,966 per Class A equivalent share for the year-ago quarter.
The latest quarter results include $1.11 billion in investment and derivative gains, up from $580 million in the first quarter of last year.
Operating earnings rose to $3.78 billion or $2,302 per Class A equivalent share in the first quarter from $2.67 billion or $1,615 per Class A equivalent share in the prior year quarter. Total revenue for the first quarter rose 15% to $43.87 billion from $38.15 billion in the same quarter last year.
The company's book value increased 5.5% from 2012 year-end to $120,525 per Class A equivalent share at March 31, 2013.
Buffett was disappointed for his inability to make a major acquisition in 2012, but he struck a deal early this year. In mid-February, ketchup maker H.J. Heinz Co. (HNZ) agreed to be taken private by an investment consortium comprised of Berkshire and New York-based investment fund 3G Capital in a deal valued at about $28 billion, including assumed debt. The deal is deemed as the largest ever in the food industry. Last week, H.J. Heinz shareholders approved deal. The deal is expected to close late in the second calendar quarter or in the third calendar quarter of 2013.
On Wednesday, Berkshire said it has agreed to buy the remaining 20% stake in Israel-based IMC International Metalworking Companies B.V. that it does not already own for $2.05 billion. Berkshire will acquire the stake from the Wertheimer family, which founded the maker of metal cutting tools sixty years ago. Berkshire had acquired 80% of IMC for $5 billion in May 2006, in one of the largest ever corporate deals in Israel's history.
Buffett, who is also one of the world's richest men, has run Berkshire for nearly five decades. He owns more than $40 billion of stock in Berkshire, which has over 80 units with businesses as varied as insurance, restaurants, furniture, clothing, candy companies, natural gas, railroad and corporate jet leasing.
Berkshire also holds significant stakes in many top-notch companies such as Coca-Cola Co. (KO), Wells Fargo & Co. (WFC), American Express Co. (AEP), International Business Machines Corp. (IBM), Visa, Inc. (V) and Procter & Gamble Co. (PG) among others.
Berkshire's Class A shares closed Friday's regular trading session at $162,904, up $2047. The company's Class B shares closed the day's session at $108.64, up $1.34 or 1.25%. The Class B shares are currently gaining 2.63% in after hours trading.
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