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Berkshire operations up
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March 11, 1998: 5:31 p.m. ET
Net earnings fell 24 percent for year but operating profit rose 26 percent
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NEW YORK (CNNfn) - Warren Buffett's primary investment outlet, Berkshire Hathaway Inc., reported 1997 net earnings fell nearly one fourth due to a windfall gain on its ABC-Capital Cities Inc. holdings the previous year.
The Omaha, Neb.-based holding company said net earnings for the year fell 24 percent to $1.9 billion, or $1,542 a share, from $2.5 billion, or $2,065 a share, in 1996.
But operating earnings, which exclude the capital gains from Walt Disney Co.'s $19 billion purchase of Capital Cities in 1996, rose 26 percent to $1.2 billion in 1997.
Class "A" shares of Berkshire Hathaway gained 1700 to 61,700, or nearly 2.8 percent, in New York Stock Exchange trading Wednesday following the announcement.
Berkshire released a preliminary statement outlining the results. The annual report for 1997 will be released Saturday, with expected comment from Buffett.
In the third quarter, Berkshire, whose primary businesses are selling various kinds of property and casualty insurance, said its GEICO auto insurance subsidiary tallied strong gains.
Berkshire raised eyebrows early last month after announcing it had stockpiled nearly 130 million ounces of silver -- more than 20 percent of the world supply -- just as the metal's price had begun to climb sharply.
That revived the specter of the Hunt brothers' big losses when they tried to corner the market for silver nearly two decades ago, but many speculative investors followed Buffett in buying the precious metal anyway. Then its price flattened.
In his comments last year, Buffett told Berkshire holders he believed stocks were overvalued, possibly presaging the turn toward the commodity.
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Berkshire Hathaway
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