Warren Buffet, Chairman and Chief Executive Officer of Berkshire Hathaway Inc
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Berkshire Hathaway on Saturday said its quarterly operating profit increased more than analysts expected, as growth in several business areas offset operations from trade tensions and tariffs and billionaire Warren Buffett's inability to distribute the conglomerate's cash.
Berkshire benefited as the resilience of consumer spending contributed to slowing US economic growth less than expected, offsetting a contraction in business investment.
But rising stock prices still hinder Buffett's attempts to find places to invest.
Berkshire ended September with a record $ 1
Buffett has gone almost four years since he made a major acquisition.
Hans Omaha, Nebraska-based conglomerate operates more than 90 businesses including Geico auto insurance company, BNSF railroad, Dairy Queen ice cream, fruit and loom underwear, and its energy company with name and real estate.
Berkshire said third-quarter operating revenues rose to $ 7.86 billion, or about $ 4,816 per share in Class A, from $ 6.88 billion, or about $ 4,189 per share, in the previous year.
Analysts on average expected operating earnings of $ 4,405.16 per share, according to Refinitive IBES.
Net income fell 11% to $ 16.52 billion, or $ 10,119 per class A share, from $ 18.54 billion, or $ 11,288 per share, reflecting fewer gains from Berkshire's investments.
A U.S. accounting rule requires that revenues incorporate unrealized gains, including on investments such as Apple and Bank of America. Buffett said the resulting volatility may mislead investors.
Berkshire A-shares closed at $ 323,400 on Friday, up 5.7% in 2019, declining to gain 22.3% in Standard & Poor's 500. Class B shares closed at $ 215.83, also up 5.7%.
The US gross domestic product increased by an annualized rate of 1.9% in the third quarter, the Department of Commerce said Wednesday in its preliminary estimate of economic growth.
However, on the same day, the Federal Reserve lowered interest rates for the third time this year amid uncertainty over trade policy, slowing global growth and Britain's proposed exit from the European Union.
BNSF, one of Berkshire's largest companies, was able to increase profit by 5% to $ 1.47 billion.
The rail's cost cuts helped offset lower revenues as demand for consumer, coal, industrial and agricultural products declined, the latter partly due to new trade policies.
Berkshire also accused US tariffs of reducing gas turbine and pipeline sales of its Precision Castparts unit.
Insurance surplus insurance surplus remained largely unchanged at $ 440 million, as improved reinsurance results offset higher loss claims at Geico.
Berkshire warned that Typhoon Hagibis, which caused widespread damage in Japan, is likely to damage the fourth-quarter result.
Nevertheless, float or insurance premiums collected before claims were paid, a major driver of Berkshire's growth, around $ 2 billion in the quarter to $ 127 billion.
Profit increased by 2% in manufacturing, services and retail, to $ 2.46 billion, as higher sales from Berkshire's car dealership and Clayton Homes motorhomes offset lower revenues from the Duracell battery, Forest River RV and various clothing and footwear businesses. .
Berkshire Hathaway Energy raised profits by 8% to $ 1.18 billion, helped by tax credits.