Berkshire's Third Quarter Net Income Triples!

warrenbuffett concerned tbi

Berkshire Hathaway just posted its third quarter earnings. It appears CDS exposure actually benefited the company and helped tripled their net income.

Third-quarter net income came in at $3.24 billion, or $2,087 per Class A equivalent share, versus $1.06 billion, or $682 per Class A equivalent share, a year earlier.

Here’s the breakdown:

Berkshire Hathaway: Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the third quarter and first nine months of 2009 and 2008 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).


Gains from derivative contracts during the third quarter primarily relate to our credit default derivative contracts and to a lesser degree to long duration equity index put option contracts. As we have previously discussed, our derivative contracts, subject as they are to mark-to-market accounting, will produce extreme volatility in our periodic reported earnings.

During the third quarter of 2009, our book value increased to $81,247 per Class A equivalent share, an increase of 15.2% from yearend and 10.1% from the end of the second quarter. In addition to our net worth of $126.1 billion, which has increased by $16.8 billion since yearend, insurance float (the net funds that we hold pursuant to insurance contracts and that we can invest for our benefit) increased from year end by about $4 billion to approximately $62 billion at September 30, 2009.

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