Thursday, 22 November, 2018

Buffett's firm quadruples 3Q profit on investment gains

Buffett Shows His Appetite for Buying Stocks Including His OwnMore Buffett Shows His Appetite for Buying Stocks Including His OwnMore
Ginger Lawrence | 06 November, 2018, 12:17

In addition, the company's operating profit increased to $6.88 billion from $3.44 billion in the third quarter, according to a regulatory filing.

Helping the company's massive insurance operations were lower estimated liabilities from property and casualty insurance in prior years and lower taxes.

Helping the company's massive insurance operations were lower estimated liabilities from insurance previous year, when major losses rocked the industry, including three U.S. hurricanes and an natural disaster in Mexico.

Warren Buffett's industrial and insurance conglomerate, said its net income jumped to $18.5 billion from $4.1 billion a year ago. "As part of new accounting standards Berkshire adopted in the beginning of the year, the company said that, ".it reports unrealized gains and losses arising from the changes in the fair values of our equity securities during the period as a component of investment gains in the Consolidated Statements of Earnings." . Buffett has warned the moves could be "wild and capricious" and told investors to look at operating profit instead.

Its effective tax rate this year has been 19.2%, compared to 27.2% in the first nine months of 2017. Many US companies' results have been skewed by the impact of the law that came into force last December.

Insurance provides a stream of cash that Berkshire can invest around the world. That amounts to dipping a toe, since he's still left with a US$103.6 billion pile of cash to put to work. Now, Buffett and Vice Chairman Charlie Munger can decide when the stock is trading at less than what they believe is the intrinsic value.

Berkshire's results also improved across its railroad, utilities and energy, manufacturing, service and retailing, and financial products business lines.

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Berkshire's insurance unit, which includes Geico and several large reinsurance firms, reported a $441 million underwriting profit in the quarter.

The company reported there were 733,152 Class A shares and 1.36 billion Class B shares, as of October 25, t It's market capitilizartuon is around $500 billion. And the company's book value per Class A share was $228,712 on September 30, higher than $217,677 one quarter ago.

Berkshire Hathaway (NYSE:BRK.A) was upgraded by equities researchers at ValuEngine from a "hold" rating to a "buy" rating in a research note issued on Monday, October 8th. Berkshire's stake in Apple was worth $57.6 billion at the end of the most recent quarter, up from $47.2 billion at the end of June.

Q3 operating earnings doubled to $6.9B from $3.4B a year earlier.

Steven Check, president of Check Capital Management Inc, a Berkshire shareholder, said Berkshire's buybacks were a good sign.

Smead said it makes sense for Buffett to buy back stock.