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Buffett's Berkshire Hathaway Says Net Income Tripled

Published: Friday, 6 Nov 2009 | 5:49 PM ET

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By: Reuters

Warren Buffett's Berkshire Hathaway Friday said third quarter net income tripled, as rising stock markets boosted its investment holdings and a quiet hurricane season contributed to higher insurance profit.

Warren Buffett
CNBC.com
Warren Buffett

Results were announced three days after Buffett revealed the biggest acquisition in his 44 years running Berkshire, a $26 billion takeover of Burlington Northern Santa Fe [BNI Loading... () ]. Berkshire had already owned 23 percent of the nation's second-largest railroad operator.

Third-quarter net income for Omaha, Nebraska-based Berkshire rose to $3.24 billion, or $2,087 per Class A share, from $1.06 billion, or $682, a year earlier.

Excluding investments, operating profit fell less than 1 percent to $2.06 billion, or $1,325 per share, from $2.07 billion, or $1,335. On that basis, analysts expected profit of $1,308.25 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 7 percent to $29.9 billion.

Berkshire benefited as rising stock markets boosted the value of its investments in companies such as Coca-Cola [KO Loading... () ], Goldman Sachs [GS Loading... () ] and Wells Fargo [WFC Loading... () ].

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Results included $1.13 billion of derivatives gains, mainly from contracts related to junk bond credit quality and to a lesser extent from the performance of four stock market indexes in the United States, Europe and Japan.

Rising stocks helped boost Berkshire's book value to $126.07 billion, or $81,247 per share, up 10 percent from three months earlier and 15 percent from year end.

Buffett often touts book value, which reflects assets minus liabilities, as a good gauge of Berkshire's health.

Insurance, which typically generates half of Berkshire's results, benefited from the quietest Atlantic hurricane season in more than a decade. Only a single named storm, Claudette, made U.S. landfall.

Class A shares of Berkshire closed Friday up $500 at $102,400 [BRKA Loading... () ], while Class B shares rose $30 to $3,425 [BRKB Loading... () ]. Both are about one-third below their record highs set in Dec. 2007.