Berkshire Sees Drop in Earnings
Filed at 7:57 p.m. EDT
By The Associated Press
OMAHA, Neb. (AP) -- Smaller gains from
investments and lower earnings from insurance
resulted in a 25 percent decline in first quarter
net profit at Berkshire Hathaway Inc., the
holding company of veteran investor Warren
Buffet.
Net earnings in the three months ended March
31 were $541 million, or $356 per class-A
share, compared to $722 million, or $582 per
share, in the same period a year ago.
Much of the decline in net earnings came from
a drop in realized investment gains to $247
million from $470 million. But the company
cautioned in a statement that such gains can
fluctuate significantly without impacting
underlying operations.
This year's first quarter includes the results of
General Re, the largest reinsurer in the United
States and third-largest in the world. Berkshire
acquired General Re, based in Stamford,
Conn., in December.
General Re's first-quarter earnings from
operations, before accounting charges, were
$151 million compared to $250 million. That
decline is due to significant underwriting losses
in both its international property and casualty
business and is life and health business.
The company's largest operation, car insurer
GEICO, broke even from underwriting in
1999's first quarter compared to a pretax profit
of $61 million in the year-ago period, an
anticipated lapse given the last two years' rate
reductions and increases in advertising
expenses.
The earnings were announced after the close of
stock trading Friday. Berkshire's Class A
shares, the highest priced on the New York
Stock Exchange, fell $2,300 to $74,300. The
''Baby Berkshire'' Class B shares, the second
most expensive on the NYSE, were down 50
cents at $2,398 each. |
