Buffett's Berkshire Profit Falls 8.6 Percent on Investments to $4.62 Billion

Warren Buffett’s Berkshire Hathaway Inc. said third-quarter profit dropped 8.6 percent on investments.

Net income fell to $4.62 billion, or $2,811 a share, from $5.05 billion, or $3,074, a year earlier, the Omaha, Nebraska-based company said in a statement. Operating earnings, which exclude some investment results, were $2,876 a share, beating the $2,593 average estimate of three analysts surveyed by Bloomberg.

Last year’s results benefited from gains on derivatives and Buffett’s financial crisis-era investments in Goldman Sachs Group Inc., General Electric Co. and Wm. Wrigley Jr. Co. The Berkshire chairman and chief executive officer advises investors to look beyond such one-time benefits.

Investment gains and losses “bounce around,” Meyer Shields, an analyst at Keefe Bruyette & Woods, said in a phone interview before results were announced. “Buffett very accurately tells people, ‘Who cares?’”

Berkshire derives most of its income from dozens of operating subsidiaries like auto insurer Geico, railroad BNSF, energy utilities and a range of manufacturing and retail operations. Those businesses have benefited in recent quarters from a rebound in the U.S. economy.

Gross domestic product expanded at a 3.5 percent annualized rate in the third quarter after a 4.6 percent gain in the three months ended June 30, Commerce Department figures showed last month. That was the strongest back-to-back reading since 2003.

Buffett often highlights the prospects for operations in the U.S. during media appearances and in his annual letter to Berkshire shareholders. Most of the businesses at Berkshire are based in the country and he continues to buy more. Last month, he agreed to purchase Van Tuyl Group, a network of car dealerships that he plans to expand through acquisitions.

He’s also looked to Canada. Berkshire’s utility struck a deal in May to buy an electric-transmission business in Alberta. Then, in August, Buffett disclosed that he was providing $3 billion in financing for Burger King Worldwide Inc.’s proposed takeover of Oakville, Ontario-based doughnut chain Tim Hortons Inc.

Climbing earnings at Berkshire’s operating units have helped push the company’s market value past $300 billion this year for the first time, making it the fifth-largest publicly traded business in the world. Class A shares have surged 21 percent this year in New York to $214,970, double the gain for the Standard & Poor’s 500 Index.