OMAHA, Neb. (AP) � Berkshire Hathaway Inc. reported an 8 percent decline in second-quarter profit Friday because it collected fewer insurance premiums and recorded $1 billion in unrealized derivative losses.
Billionaire Warren Buffett"s company said it generated $2.9 billion in net income, or $1,859 per share, during the quarter that ended June 30. That"s down from the $3.1 billion net income, or $2,018 per share, it reported in the same period a year ago.
The three analysts surveyed by Thomson Financial were expecting earnings per share of $1,370.33 on average.
Berkshire generated $30.1 billion in revenue during the second quarter, up from $27.3 billion last year.
Officials at Berkshire typically do not comment on quarterly earnings reports. A company spokeswoman did not immediately respond to messages left Friday afternoon.
The unrealized derivative losses Berkshire reported in the second quarter are down from the $1.67 billion the company reported in the first quarter. But Berkshire said in its news release that it doesn"t think investors should pay much attention to the amount of derivative or investment gains or losses in any given quarter.
Buffett has said he believes the long-term derivative contracts Berkshire has written will ultimately be profitable.
Berkshire"s derivatives fit into two major categories. Berkshire will have to pay on some of the contracts if certain U.S. entities default on their credit. Most of the other derivatives will only be paid if certain stock indices are lower in 15 or 20 years than they were when the contract was written.
Berkshire said its operating earnings offer a better measure of how the company is performing in any given period because those figures exclude derivatives and investment gains or losses.
Berkshire reported a $2.3 billion operating profit, or $1,465 per share, during the quarter. That"s down from the $2.5 billion operating profit, or $1,625 per share, it reported in the 2007 second quarter.
Berkshire owns more than 60 subsidiaries that range from insurance to clothing, furniture, and candy companies, restaurants, natural gas and corporate jet firms. Berkshire also has major investments in such companies as Coca-Cola Co., Anheuser-Busch Cos. and Wells Fargo & Co.
Berkshire"s Class A shares gained $275 to close at $115,750 Friday.
- Berkshire Hathaway Inc.: http://www.berkshirehathaway.com
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