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Warren Buffett

Ryan Enn Hughes/The Globe and Mail

Berkshire Hathaway Inc., the conglomerate run by billionaire Warren Buffett, on Friday said its third-quarter profit rose as strength in the railroad and utility businesses, as well as investment gains, offset weaker results in the insurance units.

Berkshire earned $3.92-billion (U.S.), or $2,373 per class A share, compared with $2.28-billion, or $1,380 per share, a year earlier. Book value, Mr. Buffett's preferred measure of the company's worth, rose to $111,718 per class A share, up 11.9 per cent since year-end.

The ice-cream-to-insurance conglomerate, which employs more than a quarter-million people worldwide, reported its cash pile grew to $47.78-billion, up $10-billion from the start of the year.

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Mr. Buffett told CNBC last week that he was "salivating" for a major acquisition after two deals of more than $20-billion each fell through in the last few months.

Mr. Buffett knocked off a bit of that cash on Friday with a deal to buy toy and party supply company Oriental Trading Co., though at $500-million it has little chance of "moving the needle," as Mr. Buffett has said he would like to do.

Berkshire said in a quarterly filing with securities regulators late Friday that it spent $1.8-billion in total on smaller "bolt-on" acquisitions in the first nine months of the year. Many of those deals, made by Berkshire units around the world, are never announced.

Berkshire said underwriting profits in its insurance unit fell sharply in the third quarter compared with a year ago when the business had a one-time gain. One bright spot was the auto insurer Geico, whose underwriting gain nearly quadrupled on a higher policy count and better pricing.

The company's Burlington Northern Santa Fe railroad reported a gain in revenue on higher volumes, leading to stronger earnings. Meanwhile, the utilities business was able to charge higher prices, and a real estate brokerage housed within the energy business grew by acquisition, adding to results.

Earnings in the manufacturing and retailing segment also rose sharply, boosted primarily by the chemical company Lubrizol, which was Berkshire's major acquisition of 2011.

Berkshire said in its quarterly filing that it did not repurchase any shares during the first nine months of the year.

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