Berkshire profit jumps 25%

Warren Buffett's Berkshire Hathaway said second-quarter profit rose 25 per cent on earnings from newly acquired manufacturing businesses and improved results at insurance operations.

Net income climbed to $5 billion from $4.01 billion a year earlier, the Omaha, Nebraska-based company said in a statement. Operating earnings, which exclude some investment results, were $2,803 a share, missing the average $2,911 estimate of three analysts surveyed by Bloomberg.

Berkshire's businesses represent a cross-section of the economy and provide Buffett, 85, with a steady stream of cash for more investments. Since the start of the year, he's added to the company's manufacturing operations, completing deals for battery-maker Duracell and Precision Castparts, a global supplier to the aerospace industry. Those businesses helped bolster results, as did a rebound at auto insurer Geico, even as earnings slumped at the company's railroad and energy businesses.
 

"It's an insurance-based conglomerate and the insurance underwriting turned around at a time when a lot of the peer group saw a deterioration," said Cathy Seifert, an equity analyst at S&P Global Market Intelligence.

Berkshire shares have climbed 10 per cent this year to $218,010 at 4 pm in New York compared with the 6.8 per cent gain in the S&P 500 Index. The statement was released after the close of regular trading.

Results were also helped by a $610 million gain from the redemption of an investment in Kraft Heinz preferred stock. Buffett has long told shareholders that they should focus on the underlying earnings of the Berkshire's operating businesses, rather than gains or losses on securities that are reflected in the company's income statement.