Despite plenty of signs that Berkshire Hathaway’s businesses have benefited from a modestly stronger economy this year, second quarter results fell from the previous year in large part because of foreign exchange fluctuations on debt the company holds in foreign currencies.
Insurance, however, has been Berkshire’s most important segment for some time and while the amount of premiums the company is collecting continues to rise, it swung to an underwriting loss in the second quarter. That was mostly because of retroactive policies written by Berkshire Re.
Most of Berkshire’s other businesses performed well – particularly its railroad Burlington Northern Santa Fe, which reported a 15% gain in revenue and 24% gain in pre-tax income. The building products segment reflected a more buoyant housing market with a 31% increase in pre-tax profits and while retailing revenues struggled, the group increased its income by 27%.
Shareholders equity increased to more than $300 billion for the first time ever and book value per share has risen more than 6% since the start of the year, trailing the S&P 500 Index. Insurance float also increased to more than $100 billion.