Warren Buffett's Berkshire Hathaway (BRK.A) posted lower quarterly earnings than Wall Street expected as underwriting losses overpowered growth at the conglomerate's Burlington Northern railroad and some manufacturing businesses.
Net earnings at the Omaha, Neb.-based conglomerate dropped 27% in the three months through March to $4.06 billion, or $2,469 a share, Berkshire said in a statement. That lagged behind the $2,705 average of analysts' estimates in a Bloomberg survey, a disappointing kickoff for this weekend's annual investor gala where Berkshire holders can ask questions of the 86-year-old Buffett himself, as well as Vice Chairman Charlie Munger.
In the underwriting portion of Berkshire's insurance business, the company posted a loss of $267 million, compared with profit of $213 million a year earlier as claim payouts and related expenses climbed 16% at auto insurer Geico.
Reinsurer General Re, meanwhile, posted a pre-tax underwriting loss of $143 million after the U.K. changed the way lump-sum personal injury settlements are calculated. That alteration is likely to "significantly increase claim costs associated with currently unsettled cases, as well as for future cases," the company said in a regulatory filing.
Buffett's company reported a 1.2% drop in income from investments through the insurance business, which reached $908 million in the three months through March.
The total value of stock holdings, including Buffett's "Big Four" portfolio of Wells Fargo (WFC) , American Express (AXP) , Coca-Cola (KO) and IBM (IBM) was $133.4 billion as of March 31, compared with $120.5 billion at the end of 2016.