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Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune's Most Powerful Women's Summit in Washington October 13, 2015. (KEVIN LAMARQUE/REUTERS)
Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune's Most Powerful Women's Summit in Washington October 13, 2015. (KEVIN LAMARQUE/REUTERS)

Berkshire posts solid results despite profit drop Add to ...

Berkshire Hathaway Inc. reported a 24-per-cent drop in third-quarter profit on Friday because last year’s results were helped by a huge paper gain on the value of its Kraft Heinz Food Co. stake.

The conglomerate billionaire Warren Buffett leads posted solid results at most of the more than 90 companies it owns as it reported net income of $7.2-billion (U.S.) or $4,379 per Class A share in the quarter. That’s down from $9.43-billion or $5,737 a year ago when it recorded a $4.4-billion after-tax gain after Kraft and Heinz merged.

Buffett says operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely. Analysts generally base their estimates on Berkshire’s operating earnings, which came in at $2,951 per Class A share.

The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $3,021.83.

Revenue at the Omaha-based company grew slightly to $59.07-billion in the quarter, up from $58.99-billion last year.

Berkshire’s profit was also helped by the Precision Castparts and Duracell acquisitions it made early this year, and its mountain of cash grew to nearly $85-billion at the end of September, up from roughly $73-billion in June.

The record amount of cash Berkshire is holding will only add to speculation about what Buffett’s next acquisition might be.

Berkshire owns more than 90 subsidiaries, including clothing, furniture and jewellery firms. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.

Berkshire shares have climbed 8.5 per cent since the beginning of the year. In the final minutes of trading on Friday, shares hit $214,545, a climb of 4 per cent in the past 12 months.

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