2023-08-05 19:31:10
© Reuters. Warren Buffett, CEO da Berkshire Hathaway
Omaha, Nebraska EUA
06/05/2018
REUTERS/Rick Wilking/File Photo/File Photo
Por Jonathan Stempel
(Reuters) – Berkshire Hathaway Inc (NYSE:) posted its highest-ever quarterly operating profit on Saturday, as equity gains helped the conglomerate led by billionaire Warren Buffett post an overall profit of nearly $36 billion.
Higher interest rates and better results from auto insurer Geico allowed Berkshire’s insurance business to generate more cash in the second quarter, with profit up 38%.
While operating profit topped $10 billion, that same interest rate hike made home buying and remodeling more expensive, hurting Clayton Homes’ bottom line, as well as Bekrshire’s other real estate businesses, and Bekrshire’s trailer purchase. Forest River, where revenues plummeted 34%.
Profits also fell at one of Berkshire’s biggest businesses, the BNSF railroad, with a 24% drop reflecting lower shipments of consumer goods, price competition from truck drivers and higher employee wages.
Berkshire also appeared wary of high share prices as US stocks extended the rally.
During the second quarter, the balance was the sale of eight billion dollars in shares.
“The story here is interest rates and stock valuation,” said Jim Shanahan, an analyst at Edward Jones, which has a “buy” rating on Berkshire.
“The impact on interest rate earnings on investment income is offsetting the weakness in the economy caused by that same rate,” he added. “And it’s clear that there aren’t many attractive investment opportunities out there.”
Investors watch Berkshire closely because of Buffett’s reputation and because the results of the company’s operating units, based in Omaha, Nebraska, often reflect broader economic trends.
Buffett will turn 93 on August 30. His fortune is valued at 117.5 billion dollars, the sixth richest man in the world, according to Forbes magazine.
(Reporting by Jonathan Stempel in New York)
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