REUTERS: Berkshire Hathaway Inc on Saturday said its quarterly operating profit fell more than analysts expected, as weaker results from insurance underwriting and a slowing economy weighed on the conglomerate run by billionaire Warren Buffett.
The auto insurer Geico suffered larger accident gains, while cargo volumes for consumer and agricultural products declined at the BNSF railroad. Earnings barely budged in Berkshire's manufacturing and its service and retailing lines of business.
Second-quarter operating profit declined 11per cent to US$6.14 billion, or roughly US$3,757 per Class A share, from US$6.89 billion, or roughly US$4,190 per Class A share, a year earlier.
Analysts on average expected operating profit of US$3,851.28 per share, according to Refinitiv IBES.
Berkshire also said quarterly net income rose 17per cent to US$14.07 billion, or US$8,608 per Class A share, from US$12.01 billion, or US$7,301 per Class A share, a year earlier, reflecting higher unrealized gains on Berkshire's investments.
A U.S. accounting rule requires Berkshire to report such gains with earnings. That rule adds volatility to Berkshire's net results, and Buffett says it can mislead investors.
The U.S. economy's annualized growth rate slowed to 2.1per cent in the second quarter from 3.1per cent in the first quarter, as an acceleration in consumer spending was partially offset by declining exports, manufacturing and business investment, reflecting the U.S.-China trade war.
Berkshire ended June with US$122.4 billion of cash and equivalents, though it spent US$2.1 billion in the quarter to repurchase its own stock.
The cash hoard reflects Buffett's 3-1/2-year drought in finding major acquisitions. He committed US$10 billion in April to help Occidental Petroleum Corp buy rival Anardako Petroleum Corp .
Berkshire operates more than 90 businesses that also include Dairy Queen ice cream, Fruit of the Loom underwear, and its namesake energy company and real estate brokerage.
(Reporting by Jonathan Stempel in New York; Editing by Hugh Lawson)