Storm Losses Push Berkshire Profit Down 37%

Storm Losses Push Berkshire Profit Down 37%

NU Online News Service, Nov. 8, 4:29 p.m. EST? Berkshire Hathaway Inc., billionaire Warren Buffett's Omaha, Neb.-based holding company, saw its third-quarter profit dip 37 percent to $1.137 billion compared to the year-ago quarter, as the company's insurance operation suffered after-tax hurricane losses of about $816 million.[@@]

The company stressed that all of Berkshire's insurance operations have been performing very well. "However," the company went on to state, "results for the third quarter of 2004 were negatively impacted by the four hurricanes that struck the United States and the Caribbean [in August and September]."

In its insurance business, Berkshire reported an underwriting loss of $215 million for the third quarter. In contrast, the company had $260 million underwriting profit during the year-ago quarter. Berkshire's investment income from insurance for the third quarter also deteriorated, albeit more modestly, falling to $484 million from $519 million one year ago.

Berkshire also took an after-tax charge of $255 million from its non-insurance business for the third quarter, related to the write-off of its MidAmerican Energy Holdings' mineral extraction facilities, which, the company explained, consistently lost money after becoming operational in 2002.

Berkshire Hathaway, about 40 percent of which is owned by chairman and chief executive Warren Buffett, operates a variety of business units, including National Indemnity, GEICO Corporation, and reinsurance giant General Re.