Warren Buffett's Berkshire Hathaway on Friday said second-quarter profit fell 40 percent, as declining stock prices depressed the value of his derivative contracts.
Operating profit nevertheless soared 73 percent, helped by the takeover of railroad operator Burlington Northern Santa Fe, improvement in insurance underwriting results, and a turnaround in performance at the NetJets corporate plane unit.
Net income fell to $1.97 billion, or $1,195 per Class A share, from $3.3 billion, or $2.123, a year earlier.
Excluding investments, operating profit rose to $3.07 billion, or $1,866 per share, from $1.78 billion, or $1,147.
Analysts on average expected operating profit of $1,360 per share, according to Thomson Reuters I/B/E/S.
Berkshire recorded $1.41 billion of losses on derivatives, including long-term contracts tied to equity indexes, compared with a year-earlier $1.53 billion profit.
Book value per Class A share, Buffett's preferred measure for performance, fell 3 percent to $86,661 as of June 30 from $89,374 as of March 31.
Results included $603 million of profit from Burlington Northern, in the first full quarter since Berkshire in February paid $26.5 billion for the 77.5 percent it did not already own of the second-largest U.S. railroad company.
Insurance operations, Berkshire's biggest business, saw operating profit jump 23 percent to $1.55 billion, including a sevenfold increase in underwriting profit to $462 million.
Berkshire said NetJets posted a $57.5 million pre-tax profit, compared with a year-earlier $252.5 million loss, after Buffett installed David Sokol, who chairs Berkshire's MidAmerican Energy Holdings unit, to turn that unit around.
In Friday trading on the New York Stock Exchange, Berkshire Class A shares closed down $785 at $120,600, and its Class B shares closed down 36 cents at $80.47.
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