Third quarter earnings results
Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE’BRK.B) reported that its operating earnings for the third quarter were $4.724 billion, up 29% from $3.662 billion in the year-ago quarter.
Its adjusted earnings were $2,876 per class A shares compared with $2,228 per Class A shares in the same period a year ago. Its revenue was $51.199 billion compared with $46.541 billion a year ago.
Analysts expected Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) to report $2,560.29 in earnings per Class A share. Its revenue is expected to be around $51.328 billion for the third quarter.
During the second quarter, Buffett’s conglomerate reported a 41% increase in net earnings of $6.4 billion or $3,889 per Class A share. Its operating earnings were $4.33 billion.
The conglomerate’s revenue in its railroad, utilities and energy businesses increased from $9.04 billion to $10.7 billion.
Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) said its net earnings attributable to its shareholders were $4.617 billion during the quarter, down from $5.053 billion in the same period last year.
Berkshire Hathaway recorded Tesco impairment
The conglomerate recorded $678 million impairment before tax from its investment in Tesco Corporation (TESO). The stock price of the grocery operator declined around 34% during the quarter disclosing that its profit estimate was overstated. Last month, Tesco revealed that Berkshire Hathaway reduced its stake to less than 3%.
Last month, Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK.B) entered an agreement to acquire Van Tuyl Group, the fifth largest auto dealer in the United States. Buffett said Van Tuyl Grouop will be renamed Berkshire Hathaway Automotive and Larry Van Tuyl will serve as chairman of the subsidiary.
David Kass, a professor at the University of Maryland’s Robert H. Smith School of business told Bloomberg, “No one is perfect. Tesco is a large mistake.”
Berkshire Hathaway’s book value
According to Berkshire Hathaway Inc (NYSE:BRK.A) (NYSE:BRK.B) its book value per class A equivalent rose 7.1% to $144,542 as of September 30, 2014. Its shareholder’s equity increased by $15.6 billion since the beginning of this year.
Buffett previously indicated that he could repurchase shares if Berkshire Hathaway’s stock price falls to 1.2 times book value.
Berkshire Hathaway’s Class A stock closed $214,970,000 per share while its Class B stock closed $143.61 per share on Friday.