Quarterly profit at Warren Buffett's Berkshire Hathaway (BRK.A) - Get BRK.A Report more than doubled after a $4.4 billion gain on its investment in food products giant Kraft-Heinz (KHC) - Get Kraft Heinz Company (KHC) Report .
Net income in the three months through September rose to $9.43 billion, or $5,737 a share, the company said in a regulatory filing after the close of trading on Friday.
Excluding the one-time benefit, growth in the Geico auto insurance business and the acquisition of the Van Tuyl automobile dealership chain helped drive operating earnings to $2,769 a share, topping the average estimate of $2,720 from analysts in a Bloomberg survey.
Buffett's H.J. Heinz, a joint holding with Brazil's 3G Capital, scooped up Kraft Food Group in March, creating the third-largest food conglomerate in North America. The merger remains a favorite long-term holding for TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust.
Berkshire's total insurance underwriting income dwindled to 34% in the quarter, to $414 million, amid sharp declines in its two reinsurance businesses. Still, profits improved at auto insurance provider Geico, where premiums climbed 11% to $5.8 billion amid gains in the number of policies and higher rates.
Even Geico was not without its challenges, though. The loss ratio, which measures claim payouts against premiums, climbed more than 2 percentage points, to 80.4% as cheap gas prices prompted more customers to take to the road for longer stretches.
"We are experiencing increases in claims frequencies and severities," Berkshire said in its filing. "As a result, we continue to implement premium rate increases where necessary."
Profit at Burlington Northern Santa Fe, one of the largest railroads in North America with roughly 32,500 miles of track in 28 states, climbed about 12% to $1.16 billion, largely due to a sharp decrease in operating expenses. Revenue from agricultural shipments gained 4% to about $1 billion, while total volume declined as lower crude oil prices weighed on shipments of petroleum products and sand used for hydraulic fracturing, the company said.
The performance of Buffett's largest acquisition to date, the $32 billion purchase of airplane parts-maker Precision Castparts (PCP) , has yet to be reflected in its earnings, since the transaction is subject to the approval of both investors and regulators. Precision Castparts shareholders are scheduled to vote on the deal at a special meeting Nov. 19.
Sales in the Berkshire's manufacturing, service and retailing unit climbed nearly 10% to $27.6 billion, partly driven by a $6.2 billion gain from the Van Tuyl acquisition, which included 81 auto dealerships, and the purchase of Germany-based Detlev Louis Motorad, a motorcycle accessories merchant.