Buffett company profit plunges on Japan quake
New York, May 7, 2011
Warren Buffett's conglomerate Berkshire Hathaway reported a smaller profit for the first quarter, as reinsurance losses from the March 11 earthquake in Japan dragged down results.
But the company's quarterly report made no mention at all of David Sokol, the former Berkshire executive whose sudden resignation at the end of the quarter created a scandal for Berkshire and prompted an SEC probe.
Buffett preannounced quarterly results at last Saturday's annual meeting of Berkshire, the ice-cream-to-insurance giant the world's third-richest man controls.
Berkshire reported a net profit of $1.51 billion, or $917 per Class A share, compared with a profit of $3.63 billion, or $2,272 per Class A share, a year earlier.
The company took a provision of $1.7 billion in the first quarter for catastrophe losses, primarily for the Japan earthquake but also from a quake in New Zealand and flooding in Australia. Buffett last weekend said the first quarter was the second worst in the industry's history.
Berkshire also recorded losses of $506 million in the first quarter for stocks where the company's investment was in a loss position and that loss was not considered temporary.
The biggest share of the loss was an impairment on part of Berkshire's stake in Wells Fargo, and the rest came from an impairment on the stake in Kraft Foods.
Berkshire came under pressure from securities regulators last year over the way it accounted for losses on stocks in its portfolio, with the SEC pushing the company to recognize such losses more quickly.-Reuters