(Bloomberg) -- Berkshire Hathaway Inc.’s first-quarter profitclimbed 9.8% as lower fuel prices helped the railroad business, andinvestment income improved because of Chairman Warren Buffett’swager on Burger King.

Net income rose to $5.16 billion, or $3,143 per share, from$4.71 billion, or $2,862, a year earlier, Omaha, Nebraska-basedBerkshire said Friday in a statement. Operating earnings, whichexclude some investment results, were $2,583 per share, beating the$2,373 estimate of three analysts surveyed by Bloomberg.

Investors gathered in Omaha this past weekend for Berkshire’sannual meeting and helped Buffett, 84, celebrate his goldenanniversary running the company. When he took control five decadesago, it was a struggling textile maker. He gradually transformedBerkshire into a sprawling conglomerate with operations that nowinclude insurers, utilities, manufacturers, retailers and one ofthe largest U.S. railroads.

“He’s got good, capable managers” running a stable of profitablebusinesses, said Cliff Gallant, an analyst at Nomura Holdings Inc.“His high-class problem is figuring out what to do with thecash.”

Investment income from the insurance segment advanced to $875million from $720 million, fueled by dividends from Buffett’sinvestment in the combination of the Burger King and Tim Hortonschains to form Restaurant Brands International Inc. Results werealso helped by an $857 million gain on derivatives.

Fuel Prices

Berkshire’s biggest unit, the BNSF railroad, contributed $1.05billion to quarterly earnings, compared with $724 million a yearearlier. The railroad said last week that it won back market sharefor grain and agriculture commodities that it lost to Union PacificCorp. in 2014.

The railroad had struggled with service as harsh winter weatherslowed train speeds and a record harvest and more oil shipmentsboosted demand. Berkshire said that lower fuel prices and improvedoperating performance helped first-quarter results.

BNSF, acquired in 2010, fits in with Buffett’s strategy to ownmore businesses outright. In the earlier part of his career, hebuilt Berkshire’s value having insurance units invest in stockslike Coca-Cola Co. and Washington Post Co. that later surged.

Building Products

The manufacturing, service and retail segment, which includestoolmaker Iscar and chemical company Lubrizol, added $1.12 billionto earnings, compared with $933 million a year earlier. Profitclimbed 59% to $230 million at the segment selling buildingproducts as the Shaw carpet business and Johns Manville insulationprovider benefited from higher sales and lower costs for energy andraw materials.

Profit at the utility unit, Berkshire Hathaway Energy, fell to$421 million from $452 million a year earlier as milder weatherlimited demand. The business operates natural-gas pipelines thatstretch from the Great Lakes to Texas and power companies in statesincluding Iowa and Nevada.

The mix of subsidiaries at Berkshire gives it broad exposure tothe U.S. economy. The billionaire has frequently highlighted theprospects for businesses in the country, and wrote in a letter toshareholders in February that its market economy would “continue towork its magic.” He cautioned that the gains wouldn’t come in asmooth manner.

Van Tuyl

Recent data suggest the U.S. is hitting some speed bumps. Grossdomestic product sputtered to a near halt in the first quarter,expanding at a 0.2% annualized pace, Commerce Department figuresshowed Wednesday in Washington. The weaker- than-forecast resultwas driven by severe winter weather and a slump in exports andbusiness spending.

Berkshire is showing little sign of pulling back. The company’s$15 billion outlay on plant and equipment in 2014 set a record, andBuffett said there will be more opportunities to spend in the U.S.this year. The capital budget at the railroad alone is $6 billionin 2015.

The billionaire also continues to buy more businesses. Lastyear, he agreed to purchase battery-maker Duracell as well as VanTuyl Group, a network of car dealerships. Berkshire said in aregulatory filing Friday that it paid $4.1 billion for VanTuyl.

Book value, a measure of assets minus liabilities, rose to$146,963 per share at the end of March from $146,186 three monthsearlier. Buffett has said the figure is a useful, thoughunderstated, gauge of how much Berkshire is worth. Cash increasedto a record $63.7 billion on March 31 from $63.3 billion threemonths earlier

3G Deals

Buffett has been using Berkshire’s cash hoard to help financedeals. In 2013, he partnered with buyout firm 3G Capital to takeketchup maker H.J. Heinz private. Then, in March, Heinz announcedthat it was buying Kraft Foods Group Inc. with stock and $10billion in additional funds from Berkshire and 3G.

The transaction is poised to create a packaged-food colossuswith more than $25 billion in revenue. Buffett’s firm will own alittle more than a quarter of the business. 3G also led the dealthat joined Burger King and Tim Hortons.

Some of Buffett’s stock picks faltered in the past year.American Express Co. and International Business Machines Corp., twoof the biggest holdings, have slipped more than 10% in the lastyear. Coke is little changed in the last 12 months.

Berkshire’s own shares have come down from their record high inDecember. Class A shares have slipped 4.5% to $215,800 from the endof last year.

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