(Bloomberg) -- Berkshire Hathaway Inc. reported a 3.8% decline in first-quarter profit, as underwriting results declined at insurance businesses and on reduced earnings from Chairman Warren Buffett’s derivatives wagers.
Net income slipped to $4.71 billion, or $2,862 a share, from $4.89 billion, or $2,977, a year earlier, the Omaha, Nebraska-based company said yesterday. The decrease in profit was the first since 2012.
Buffett, who welcomed shareholders to Berkshire’s annual meeting May 3, has been expanding in businesses like energy and railroads that provide opportunities for billions of dollars in capital spending and relatively stable returns tied to the U.S. economy. Results can be more volatile on Buffett’s financial- market bets and in reinsurance, in which the company takes on risks from other insurers in the U.S. and beyond.
“When you get a substantial portion of your earnings from insurance, you live with the fact that the numbers bump around,” Bill Smead, chief investment officer at Smead Capital Management, which oversees about $950 million including Berkshire shares, said in an interview.
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