Berkshire’s 2Q Earnings Off 42%, Shaw’s Sales Up 1

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Berkshire’s 2Q Earnings Off 42%, Shaw’s Sales Up 1
Omaha, NE, August 6--Berkshire Hathaway’s second-quarter net income slumped 42% in comparison with a year earlier that was boosted by investment gains. The Omaha, Neb., conglomerate run by billionaire Warren Buffett posted net income of $1.28 billion, or $834 a share, compared with $2.23 billion, or $1,452 a share, a year earlier. The latest quarter's results included $172 million in investment losses, versus year-ago gains of $905 million. Berkshire had $1.14 billion in gains from sales of insurance-related investments last year, compared with $217 million in the recently concluded second-quarter. This year's period also included a $445 million loss on foreign-currency contracts. Revenue jumped 25% to $18 billion. Revenue at Berkshire`s insurance businesses fell 2.8% to $6.17 billion, as underwriting earnings surged 60% to $422 million. In the Shaw Industries unit, revenue rose to $1.33 billion from $1.17 billion. The building products segment posted revenue of $1.13 billion, up from $1 billion a year ago, while revenue at the finance and financial products unit rose to $1.06 billion from $443 million. Premiums earned at the company`s Geico auto-insurance business climbed 15% to $2.18 billion, as losses and loss expenses rose 5.7% to $1.59 billion. For the Berkshire Hathaway Reinsurance Group, premiums earned plunged 34% to $936 million. The business wrote $431 million in retroactive reinsurance policies a year earlier, compared with a single $20 million policy in the latest quarter. The company said such policies typically provide "very large, but limited, indemnification of losses and loss adjustment expenses with respect to past loss events, which are generally expected to be paid over long periods of time." Sales-and-services revenue soared 81% to $12.11 billion. The latest quarter included modular-home builder Clayton Homes, acquired a year ago, the inclusion of fixed-income investor Value Capital LP's results effective Jan. 1 as a result of changes in national accounting standards and a full three-month period of results for convenience-store distributor McLane Company Inc. The business was acquired by Berkshire from Wal-Mart Stores Inc. in May 2003. McLane contributed $5.89 billion of revenue in the quarter, compared with $1.67 billion a year ago.


Related Topics:Shaw Industries Group, Inc.