Berkshire Hathaway

(BRK.A) - Get Report

said Friday its third-quarter profit slid 77%, attributing most of the decline to unrealized losses on derivatives and other securities.

The insurance giant and investment manager, which is led by billionaire Warren Buffett, reported net income of $1.06 billion, or $682 per Class-A share, down from $4.55 billion, or $2,942 a share, a year ago. Two analysts that cover the firm expected higher earnings of $1,429 per share, on average, according to Thomson Reuters.

While hurricanes Gustav and Ike hurt its profitability, as did competition from other insurers, Berkshire emphasized that most of the profit drop was the result of a $1.01 billion decline in the value of its derivatives and other investments. In its statement, the company asserted that "the amount of these in any given quarter or year is usually meaningless," since most of the losses were not realized.

But without including such losses, Berkshire's operating earnings still fell 19% to $2.07 billion, or $1,335 per Class-A share, from $2.56 billion, or $1,655 a share, a year ago.