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Berkshire Hathaway net earnings drop to US$4.1 billion in Q3, down from US$7.2 billion in Q3 2016


November 6, 2017   by Canadian Underwriter


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Omaha, Nebraska-based Berkshire Hathaway Inc. has reported net earnings attributable to shareholders of US$4.1 billion for the third quarter of 2017 ending Sept. 30, down from US$7.2 billion in Q3 2016.

For the first nine months of the year, net earnings attributable to shareholders were US$12.4 billion, down from US$17.8 billion in 9M 2016, Berkshire Hathaway noted in a press release on Friday.

Operating earnings in the third quarter were US$3.4 billion in the most recent quarter compared to US$4.8 billion in Q3 2016. In 9M 2017, operating earnings were US$11.1 billion compared to US$13.2 billion for the same time period last year. Berkshire Hathaway noted in the release that operating earnings in Q3 and 9M 2017 are net of pre-tax underwriting losses of approximately US$3 billion (US$1.95 billion after-tax), attributable to three major hurricanes (Harvey, Irma and Maria) and an earthquake in Mexico.

Operating earnings this year were also net of after-tax foreign currency exchange rate losses of US$252 million in Q3 and US$847 million in 9M “related to the revaluation of certain liabilities of Berkshire and its U.S.-based subsidiaries denominated in currencies other than the U.S. dollar.” In 2016, operating earnings included after-tax foreign currency exchange rate losses of US$2 million in Q3 and gains of US$162 million in 9M.

Berkshire Hathaway’s insurance-underwriting segment saw a loss of US$1.4 billion, compared to operating earnings of US$272 million in Q3 2016 (US$1.7 billion loss in 9M, compared to operating earnings of US$822 million in 9M 2016).

Insurance-investment operating earnings were US$1 billion in the most recent quarter, up from US$850 million in the same quarter last year. For the first nine months of the year, operating earnings were US$2.9 billion, up from US$2.7 billion in the first nine months of 2016, the release added.

Railroad, utilities and energy sector third quarter operating earnings were US$2 billion, similar to US$1.95 billion in Q3 2016. For 9M 2017, railroad, utilities and energy sector operating earnings were US$4.8 billion, up from US$4.4 billion in 9M 2016.

Other businesses third quarter operating earnings were US$2.035 billion in the most recent quarter, the release said, similar to US$2.039 billion in the third quarter of last year. The “Other” segment saw a loss of US$201 million in Q3 2017 (US$262 million in Q3 2016) and a US$537 loss in 9M 2017 (US$310 million in 9M 2016).

Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and services.