The Omaha-based company delivered relatively flat results made to appear spectacular by the unrealized investment gains. The strength of its insurance businesses like Geico offset weakness in those more tied to the economy, like NetJets and Berkshire's manufacturing businesses.
"I thought it was pretty much as predicted, but still in good, solid shape," said Andy Kilpatrick, the stockbroker-author of "Of Permanent Value, the Story of Warren Buffett."
Berkshire said it generated $3.2 billion, or $2,087 per share, in net income. That's up significantly from last year's $1.1 billion, or $682 per share. The results don't include Berkshire's headline-grabbing $26.3 billion acquisition of railroad operator Burlington Northern Santa Fe Corp., which was announced on Tuesday.
Most of the swing in Berkshire's earnings is related to an unrealized $1.1 billion gain on its derivatives, some of which are tied to credit defaults and some of which are tied to equity markets. That compares with an unrealized $819 million loss on Berkshire's derivatives in last year's third quarter.
Excluding the investment and derivative gains, Berkshire's operating earnings were nearly flat at $2.06 billion, or $1,325 per share. Last year, Berkshire reported operating earnings of $2.07 billion, or $1,335 per share.
The four analysts surveyed by Thomson Reuters expected Berkshire to report earnings per share of $1,308.25.
Berkshire executives typically do not comment on quarterly earnings reports, and they did not immediately respond to an interview request on Friday.
"Most of the businesses here remain pretty sluggish with a couple bright spots in insurance," said Justin Fuller, a partner with Midway Capital Research & Management in Chicago who writes about Berkshire online at http://www.buffettologist.com.
Operating profit in Berkshire's insurance underwriting business, which includes Geico and General Reinsurance, soared to $363 million from $81 million a year ago thanks partly to this year's relatively quiet hurricane season.
Berkshire's insurance units also reported better investment income of $976 million in the quarter, up from $809 million a year ago.
Berkshire's non-insurance companies, which includes Shaw carpet, Acme Brick, Nebraska Furniture Mart and NetJets, generated an operating profit of $774 million in the quarter, down from $1.1 billion a year ago.
