Berkshire Hathaway’s profit rose 8.2 per cent in the first quarter as gains at manufacturing units and the investment portfolio overseen by chairman Warren Buffett offset a slump at insurance units and the railroad.
Net income climbed to US$5.59 billion from $5.16bn a year earlier, the Omaha, Nebraska-based company said Saturday in a statement with preliminary results.
The billionaire has been beefing up the segment of his business that makes products from T-shirts to bricks. In January, he completed a $32.7bn takeover of Precision Castparts, a supplier to the aerospace and energy industries. A month later, he closed on the acquisition of battery maker Duracell for more than $2bn.
Results included a profit on Procter & Gamble stock that Mr Buffett traded to that company for Duracell. That helped push investment and derivative gains to $1.85bn in the first quarter, twice as much as a year earlier. The manufacturing, service and retailing segment contributed $1.27bn, up from $1.12bn.
Insurance underwriting income slipped by more than half to $213 million as the company incurred costs from US hailstorms. Profit from the railroad and utilities operation slipped 16 per cent to $1.23bn.
“The railroad earnings are down significantly,” Mr Buffett said at his annual meeting Saturday in Omaha. “All of the major railroads were down significantly in the first quarter and probably will continue to be down, almost certainly will continue to be down the balance of the year.”
Berkshire’s BNSF railroad in January reduced its spending plan for the year, and this month it put 4,600 workers on furlough in response to declining cargo traffic.
Follow The National’s Business section on Twitter