Fairfax Financial Report Q1 Earnings, Posts Surprise Profit

Fairfax Financial Holdings Ltd (TSE:FFH) announced its earnings for the first quarter of 2013 today, Thursday May 2. the company revealed that it had earned $161.6 million or $7.12 a share, in the first three months of the year. On today’s market shares in the Canadian investment vehicle trended higher and closed at $408.

Fairfax Financial Report Q1 Earnings, Posts Surprise Profit

Analysts following earnings had expected the company to post a loss of 5 cents a share. In the first quarter of 2012, the company lost 69 cents per share on revenue of $1.8 billion. Comparing Fairfax Financial Holdings Ltd (TSE:FFH) earnings year on year is not really a useful metric, because of how inconsistent the firm’s EPS tends to be.

Fairfax Financial Comparison To 2012, Q4

In 2012, Fairfax Financial Holdings Ltd (NYSE:FFH) managed to earn $18.90 per share in the fourth quarter, making up what was by far the single largest part of the company’s annual earnings per share. The firm’s exposure to huge investments means that it is quite difficult to predict when it will exit positions and reap rewards. Fairfax Financial Holdings Ltd (TSE:FFH) in terms of its strategy and management style, is often thought of as the Canadian Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B).

In recent months a few interesting decisions have been made by Prem Watsa, the Fairfax Financial Holdings Ltd (TSE:FFH) founder and CEO, that opened the company up to some interesting exposure. Watsa is still completely long in Research In Motion Ltd. (NASDAQ:BBRY) (TSE:BB), which he serves on the board of, and he has repeated his dedication to what many see as a failing venture.

Since the start of the year, Fairfax Financial Holdings Ltd (TSE:FFH) shares have risen in value by around 13.5 percent. The company gives investors great exposure to a mix of investments, and the defensive strategy that Prem Watsa is currently following, in which he doesn’t mind lagging the indexes if it means avoiding high risk, makes it a stable company for the time being.

One of the more interesting predictions to come out of Watsa, and Fairfax Financial Holdings Ltd (TSE:FFH), in recent weeks is about the future of the US Dollar. Prem Watsa thinks that the dollar is headed for a period of deflation, and he’s putting the resources of his company behind the thesis. Fairfax Financial Holdings Ltd is all about avoiding risks right now, and deflation in the United States seems to be a trend worth worrying about.