Warren Buffett’s Berkshire Hathaway profit rises

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Warren Buffett’s Berkshire Hathaway has reported a 46 percent rise in second quarter, boosted by improved demand in such businesses as car insurance, energy and railroads, as well as gains from investments and derivatives.

Buffett, who turns 83 later this month, has run Omaha, Nebraska-based Berkshire since 1965, and favors businesses with consistent earnings power.

Operating profit at the Omaha, Neb.-based company rose 5 per cent to $3.92-billion, or $2,384 per Class A share, from $3.72-billion, or $2,252 per share.

One of the biggest factors behind the profits rise was due the firm making a $622m profit from investments and derivatives, compared to a $612m paper loss last year.

Profit rose 10 per cent at the Burlington Northern Santa Fe railroad to $884-million as revenue increased from shipping consumer products, industrial products and coal.

Rising prices and higher customer loads helped drive a 10 percent increase in profit from its MidAmerican Energy utilities and energy unit to USD 279 million.

Meanwhile, profit got more than doubled at the Geico car insurance unit to USD 336 million, as premiums earned grew by 11 percent while underwriting expenses fell.

The company’s cash stake shrank during the quarter to USD 35.7 billion from USD 49.1 billion, largely reflecting the purchase of Heinz by Berkshire and Brazilian investment firm 3G Capital.

Another USD 5.6 billion in cash will go toward the purchase of Nevada utility NV Energy Inc. by MidAmerican Energy, which is expected to close in the first quarter of 2014. Berkshire also owns tens of billions of dollars of common stocks such as Coca-Cola Co, International Business Machines Corp and Wells Fargo & Co.