Berkshire Hathaway’s profit rises nearly $2 bn in Q2
02 Aug 2014
Legendary investor Warren Buffet's Berkshire Hathaway said yesterday that its profit was up nearly $2 billion in the second quarter.
The company, a broad-based investment conglomerate with diverse companies in its fold like Geico Auto Insurance, Burlington Northern Santa Fe Railway, Dairy Queen, Benjamin Moore, Fruit of the Loom, Heinz, and See's Candies, netted a profit of nearly $6.4 billion, up from $4.5 billion during the same period last year.
The first quarter saw Berkshire's railroad operations take a hit from the extreme winter weather in the US.
With the nation's housing market showing signs of improvement, many of the related companies falling under Berkshire Hathaway's umbrella reported good results.
Thomas Russo, a partner at investment firm Gardner Russo & Gardner said Clayton Homes, Shaw industries, Acme Brick Company, Benjamin Moore, Johns Manville all performed well, thanks to the recovery. The firm had around $1 billion worth of Berkshire Hathaway shares
According to analysts a rebounding US economy had boosted the value of Berkshire's stock portfolio and helped propel growth at the dozens of operating businesses that Buffett acquired during his four-decade tenure as chairman and chief executive officer.
These include insurers, manufacturers, retailers, utilities and one of the country's largest railroads, BNSF.
According to Bill Smead, chief of investment officer at Smead Capital Management, which oversaw about $970 million, including Berkshire stock, when it was all said and done he had a lot of leverage to the US, Bloomberg reported.
BNSF contributed $916 million to quarterly earnings, as against $884 million a year earlier as revenue increased from hauling industrial and agricultural products. According to the company, service levels were ''well below our internal standards, as well as those expected by our customers'' as the railroad worked to untangle train tie-ups caused by harsh weather.
