Net income climbed to $6.4 billion, or $3,889 a share, from $4.54 billion, or $2,763, a year earlier, the Omaha, Nebraska- based company said today in a statement. Operating earnings, which exclude some investment results, were $2,634 a share, beating the $2,482 estimate of three analysts surveyed by Bloomberg.
A rebounding U.S. economy has boosted the value of Berkshire's stock portfolio and helped propel growth at the dozens of operating business that Buffett, 83, acquired during his four-decade tenure as chairman and chief executive officer. The subsidiaries include insurers, manufacturers, retailers, utilities and one of the country's largest railroads, BNSF.
"When it's all said and done, he has a lot of leverage to the U.S.," said Bill Smead, chief investment officer at Smead Capital Management, which oversees about $970 million, including Berkshire stock.
Class A shares have risen 6.4 percent this year in New York, beating the 4.2 percent gain in the Standard & Poor's 500 Index.
U.S. companies are reporting higher profits, consumer spending is picking up and the job market is strengthening as the country rebounds from the 2008 financial crisis. The gross domestic product rose at a 4 percent annualized rate in the second quarter, bouncing back after winter weather contributed to a contraction in the first three months of the year.
Those trends stand to benefit Berkshire. Most of the businesses Buffett has bought over the years are based in the U.S. and some of the largest holdings in his company's stock portfolio — like Wells Fargo & Co. and International Business Machines Corp. — are American.
Energy, Ketchup
Buffett has also been adding to Berkshire's stable of operating businesses. Last year, the energy unit bought Nevada's largest electric utility for $5.6 billion and Buffett teamed up with buyout firm 3G Capital to take HJ Heinz Co. private.
The Heinz deal gave Berkshire half the equity in the ketchup maker and preferred shares that pay $720 million in dividends annually. Buffett has said that margins should improve as the managers that 3G installed cut costs.
Since the takeover was completed in June 2013, Heinz has eliminated thousands of jobs, announced factory closures and offered buyouts to staff at its Pittsburgh headquarters. It also announced its intention to end the pension plan in the U.S. for salaried and non-union workers.
"They've restructured the business model," Buffett said of the Heinz managers during Berkshire's shareholder meeting in May. "The brands are as strong as ever, and the cost structure is going to be significantly improved."
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