Berkshire, Shaw Report 2Q Results

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Berkshire, Shaw Report 2Q Results
Omaha, NE, August 8--Berkshire Hathaway in the second quarter reported net income of $1.45 billion, or $941 per share, up from $1.28 billion, or $834 a share, in the same period a year earlier. The company released its earnings information on Friday and also updated shareholders on its involvement in investigations that have swept the insurance industry this year. Berkshire reported revenue of $18.1 billion in the period, up from $18 billion a year earlier. The Shaw Industries unit of Berkshire Hathaway posted earnings of $139 million vs. $135 million in the same quarter of 2004. For the first half of 2005 the unit posted earnings of $227 million compared with $238 millon in the first half of 2004. Revenues at the Shaw unit for the second quarter were $1.43 billion up 8% from the same quarter of 2004. In the first six months of 2005 revenues were up $2.73 billion up 6.8% over the same period of 2004. The report stated that the higher revenue levels in 2005 reflected an increase in average net selling prices for carpet, partially offset by a reduction in unit volume. It said that despite the increases in selling prices in 2005, pre-tax earnings were adversely affected by repeated increases in petroleum-based raw material costs. Consequently, increases in production costs have outpaced increases in average net selling prices, thus producing lower net operating margins. In addition, product sample costs pertaining to the introduction of new products into the market increased in 2005 periods as compared to 2004. Berkshire also said government authorities are continuing to investigate its General Re unit to see whether it helped American International Group (AIG) misstate results through the use of so-called finite reinsurance. Regulators are also probing how some Berkshire subsidiaries accounted for finite contracts themselves, the company added. Berkshire said it's cooperating with all inquiries. There is no clear definition of finite reinsurance, but generally it's a blend of traditional reinsurance and financing.


Related Topics:Shaw Industries Group, Inc.