Banking & Finance

Buffett & Berkshire Earn Dough (BRK-A, BRK-B, BNI, MCO)

Douglas A. McIntyre

buffettimage-gates-foundationWarren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) has just reported its Q3-2009 earnings ahead of the formal expectations.  This will be perhaps one of the last similar earnings reports with a relative comparisons because of its recent acquisition of Burlington Northern Santa Fe (NYSE: BNI).  The ongoing selling of Moody’s Corp. (NYSE: MCO) will be very limited in comparison to what change the railroad addition will make.

We were expecting the insurance operations to have a stellar quarter because there were no real storms that made landfall this year in hurricane season.  Thomson Reuters figures are hard to rely upon because of two issues.  There are very few ‘official estimates’ and there are many items inside the Berkshire Hathaway earnings that Buffett includes outside of what other companies include.  The consensus estimates was listed as $1,308.25 per share, but that is again a difficult number to use as a formal estimate.  Net earnings per share was $2,087 and operating earnings were $1,325 per share.  The key metrics are what we want to focus on today.

The new book value for the end of the September 30, 2009 quarter is $81,247  per share versus a $101,000 share price as of September 30 and a $102,400 close as of today.  Last quarter’s book value on June 30, 2009 was as $73,806 per share.

The mixed picture of the earnings at his bank holdings also will be limited in scope to the impact that the railroad addition will make.  The cost basis of Buffett’s equity securities (top stocks) are $38.923 billion and there are $22.048 in unrealized gains and -$3.564 billion in unrealized losses for a fair market value of $57.407 billion.

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The full detail of the release is long as always, so you can see the full Berkshire report here.