Buffett's Zero's Were Boffo; Silver Still Dull
Monday August 3, 9:11 pm Eastern Time
Berkshire Hathaway sells bonds, boosts Q2 net
OMAHA, Neb., Aug 3 (Reuters) - Berkshire Hathaway Inc.'s (BRKa -
news) net earnings for the second quarter jumped 325 percent to
$1.18 billion after a gain on the sale of its entire investment
in U.S. government long-term zero coupon bonds, it said Monday.
The company, controlled by legendary investor Warren Buffett,
said its second-quarter realized investment gains soared to $864
million from $23 million in the same period a year ago.
In a statement accompanying the results, Berkshire Hathaway said
its 1998 net earnings were meaningless in evaluating the company
because while realized gains had a material impact on 1998
reported earnings, they had a very minor impact on the company's
shareholders' equity.
Operating earnings rose to $312 million from $255 million a year
ago.
Berkshire Hathaway, with investment holdings in such blue chips
as Coca-Cola Co., Gillette Co., American Express Co., Walt Disney
Co. and McDonald's Corp., reported net earnings of $278 million
in the 1997 second quarter.
Berkshire Hathaway, which operates several diverse businesses,
said that GEICO, its largest operation, was an important
contributor to operating earnings in the latest quarter. GEICO,
the nation's seventh-largest auto insurer, showed growth in all
categories of auto insurance -- preferred, standard and
nonstandard, it said.
In addition to its stock holdings, Berkshire Hathaway agreed in
June to acquire General Re Corp. in a deal valued at $22 billion.
General Re is one of the world's largest issuers of reinsurance
policies, which insurance companies buy to manage risks
associated with the policies they write.
Last month Berkshire Hathaway agreed to pay $725 million for
Executive Jet Inc., a company that pioneered the concept of
time-sharing for corporate jets.
Other holdings include an estimated 20 percent of the world's
estimated silver supply, acquired between July 1997 and January
1998.
Berkshire Hathaway class A shares rose $795 to $70,900.
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