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Insurance, economy weighs Berkshire Hathaway operating profit



By Jonathan Stempel

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "( Reuters) – Berkshire Hathaway Inc on Saturday said its quarterly operating profit fell more than analysts expected, as weaker results from insurance underwriting and a slow economy weakened on the conglomerate run by billionaire Warren Buffett. " data-reactid = "23"> (Reuters) ̵

1; Berkshire Hathaway Inc on Saturday said its quarterly operating profit fell more than analysts expected, as weaker-than-life insurance policies and a slowing economy weighed on the conglomerate run by billionaire Warren Buffett.

The car insurance company Geico got bigger accident benefits, while the load volume for consumer and agricultural products went down at the BNSF railway. Revenues had barely grown in Berkshire's production and its service and retail business.

Second-quarter operating profit fell 11% to $ 6.14 billion, or about $ 3,757 per class A stock, from $ 6.89 billion, or about $ 4,190 per class A, a year earlier.

Analysts on average expected operating earnings of $ 3,851.28 per share, according to Refinitive IBES.

Berkshire also said that quarterly net income rose 17% to $ 14.07 billion, or $ 8,608 per A share, from $ 12.01 billion, or $ 7,301 per share in A, a year earlier, reflecting higher unrealized gains on Berkshire's investments.

An American accounting rule requires Berkshire to report such gains with earnings. This rule adds to Berkshire's net profit volatility, and Buffett says it can mislead investors.

The US economy's annual growth rate slowed to 2.1% in the second quarter from 3.1% in the first quarter, as consumer spending acceleration was partially offset by declining exports, industry and investment, reflecting the US-China trade war .

Berkshire ended June with $ 122.4 billion in cash and equivalents, although it spent $ 2.1 billion in the quarter to repurchase its own stock.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The cash hoard reflects Buffett's 3- 1/2-year drought in finding major acquisitions. He committed $ 10 billion in April to help Occidental Petroleum Corp buy rival Anardako Petroleum Corp . " data-reactid = "31"> cash drawer reflects Buffett's 3-1 / 2-year drought when it comes to finding large purchases. He committed $ 10 billion in April to help Occidental Petroleum Corp buy rival Anardako Petroleum Corp .

Berkshire runs more than 90 businesses that also include Dairy Queen ice cream, Fruit of the Loom underwear and its name-brown energy brokerage and company.

(Reporting by Jonathan Stempel in New York; Editing by Hugh Lawson)


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