Berkshire Hathaway's Operating Income Rises 20%

By Josh Beckerman 

Warren Buffett's Berkshire Hathaway Inc. posted a 20% increase in operating profit for the first quarter, boosted by higher revenue at its core insurance and railroad divisions.

The results come as investors prepare to celebrate 50 years of Berkshire under Mr. Buffett's reign at Saturday's annual meeting in Omaha, Neb.

Mr. Buffett has turned Berkshire into a giant conglomerate that owns about 80 businesses, ranging from Lubrizol to Clayton Homes to Dairy Queen. At Berkshire's core is its insurance operation, which includes Geico Corp. and reinsurer General Re, along with a massive portfolio of securities.

In March the company helped engineer the planned merger of Kraft Foods Group Inc. and H.J. Heinz Co. Berkshire previously teamed up with private-equity firm 3G Capital Partners LP to buy Heinz for about $23 billion in 2013.

In all, Berkshire reported a first-quarter profit of $5.16 billion, or $3,143 a Class A share, compared with $4.71 billion, or $2,862 a share, a year earlier. Operating profit, which excludes some investment results, rose to $4.24 billion, or $2,583 per Class A share, from $3.53 billion, or $2,149 a share.

Analysts polled by Thomson Reuters were expecting operating earnings of $2,373 a Class A share.

Revenue rose to $48.64 billion from $45.45 billion.

Berkshire's insurance operations reported a $480 million underwriting profit, compared with $461 million in the prior year.

At the firm's closely watched railroad, utilities and energy unit, revenue rose to $9.89 billion from $9.75 billion.

Per-share book value, a measure of assets minus liabilities that is Mr. Buffett's preferred yardstick for measuring net worth, has risen 0.5% since the end of 2014, standing at $146,963 a Class A share as of March 31.

Class A shares closed Friday at $215,800 and have dropped 4.5% so far this year.

Write to Josh Beckerman at [e-mail]

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