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novice · 06-03-2005, 06:35

The Oracle does it again:

http://reuters.com/newsArticle.jhtml...toryID=7816697

Berkshire Profit Rises 40 Pct
Sat Mar 5, 2005 04:55 PM ET

By Jonathan Stempel
NEW YORK (Reuters) - Berkshire Hathaway Inc., the holding company run by billionaire Warren Buffett, said on Saturday that quarterly profit surged 40 percent, helped by a $1.63 billion gain on a successful bet the U.S. dollar would fall.

For the year, profit fell 10 percent. Buffett, in his annual letter to Berkshire shareholders, said he increased his stake in foreign currency contracts, and wants to deploy more of Berkshire's $43.4 billion of cash.

Fourth-quarter net income for the Omaha, Nebraska-based company rose to $3.34 billion, or $2,172 per Class A share, from $2.39 billion, or $1,553 per share, a year earlier. Revenue increased 1 percent to $20 billion. The per-share figures are high because Berkshire has few shares outstanding.

Berkshire's Geico auto insurance unit in 2004 posted low double-digit percentage growth in premiums, offsetting similar declines at its General Re Corp. reinsurance unit.

"Berkshire's operating companies did just fine," said Keith Trauner, a portfolio manager at Fairholme Capital Management in Short Hills, New Jersey. The firm invests $1.4 billion, including more than 20 percent in Berkshire shares.

"Geico has been shooting the lights out," he said. "General Re is deliberately slowing its business, preferring to maintain underwriting profit rather than premium volume. That's the right way to run an insurance business as competition rises."

Berkshire's many businesses sell such things as paint, mobile homes and underwear. The company also has big stakes in such companies as American Express Co., Coca-Cola Co. and Gillette Co., which agreed in January to a takeover by Procter & Gamble Co.

Buffett, who is 74 and known as the "Oracle of Omaha," is the world's second richest person according to Forbes magazine, with a net worth of about $42 billion. Microsoft Corp. Chairman Bill Gates, a Berkshire director, is the richest.

CURRENCY BET

In his annual letter, Buffett said Berkshire increased its stake in foreign currency contracts to $21.4 billion, in 12 currencies, from $20 billion on Sept. 30 and $12 billion the previous December.

Buffett has wagered against the U.S. dollar since 2002 amid concern about rising U.S. trade and budget deficits.

Last year the trade deficit rose 24 percent to a record $617.7 billion, while the budget shortfall was a record $412.3 billion. President Bush last month projected the budget deficit will rise to $427 billion in fiscal 2005.

"The evidence grows that our trade policies will put unremitting pressure on the dollar for many years to come," Buffett said. "As W.C. Fields once said when asked for a handout: 'Sorry, son, all my money's tied up in currency."'

As of Dec. 31, the greenback bought 8.3 percent fewer euros and 6.9 percent fewer Japanese yen than it did on Sept. 30.

Buffett said promptly fixing the trade deficit would likely cause currency losses for Berkshire. But he said this might be offset by the benefits of a strong dollar and low inflation to the company's big stake in dollar-based assets.

"I STRUCK OUT"

Buffett also lamented Berkshire's inability to deploy its $43.4 billion of cash, which grew 21 percent last year. "Not a happy position," he called it.

"My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings," he said. "But I struck out." He said he will seek acquisitions in 2005, including one of at least $5 billion.

Berkshire also said the liquidator of two failed Australian insurers plans to assert claims against two subsidiaries whose deception it said helped cause the insolvencies. U.S. regulators are already examining whether some General Re policies improperly helped companies smooth earnings.

For the year, profit fell to $7.31 billion, or $4,753 per share, from $8.15 billion, or $5,309 per share. Revenue increased 16 percent to $74.4 billion.

Berkshire Class A shares closed on Friday at $89,300, and its Class B shares closed at $2,979, both on the New York Stock Exchange.

06-03-2005, 06:35	#16 (permalink)
novice Super Moderator Join Date: Oct 2003 Posts: 1,222 Rep Power: 0	Re: Buffet Best $19 Billion Against Dollar The Oracle does it again: http://reuters.com/newsArticle.jhtml...toryID=7816697 Berkshire Profit Rises 40 Pct Sat Mar 5, 2005 04:55 PM ET By Jonathan Stempel NEW YORK (Reuters) - Berkshire Hathaway Inc., the holding company run by billionaire Warren Buffett, said on Saturday that quarterly profit surged 40 percent, helped by a $1.63 billion gain on a successful bet the U.S. dollar would fall. For the year, profit fell 10 percent. Buffett, in his annual letter to Berkshire shareholders, said he increased his stake in foreign currency contracts, and wants to deploy more of Berkshire's $43.4 billion of cash. Fourth-quarter net income for the Omaha, Nebraska-based company rose to $3.34 billion, or $2,172 per Class A share, from $2.39 billion, or $1,553 per share, a year earlier. Revenue increased 1 percent to $20 billion. The per-share figures are high because Berkshire has few shares outstanding. Berkshire's Geico auto insurance unit in 2004 posted low double-digit percentage growth in premiums, offsetting similar declines at its General Re Corp. reinsurance unit. "Berkshire's operating companies did just fine," said Keith Trauner, a portfolio manager at Fairholme Capital Management in Short Hills, New Jersey. The firm invests $1.4 billion, including more than 20 percent in Berkshire shares. "Geico has been shooting the lights out," he said. "General Re is deliberately slowing its business, preferring to maintain underwriting profit rather than premium volume. That's the right way to run an insurance business as competition rises." Berkshire's many businesses sell such things as paint, mobile homes and underwear. The company also has big stakes in such companies as American Express Co., Coca-Cola Co. and Gillette Co., which agreed in January to a takeover by Procter & Gamble Co. Buffett, who is 74 and known as the "Oracle of Omaha," is the world's second richest person according to Forbes magazine, with a net worth of about $42 billion. Microsoft Corp. Chairman Bill Gates, a Berkshire director, is the richest. CURRENCY BET In his annual letter, Buffett said Berkshire increased its stake in foreign currency contracts to $21.4 billion, in 12 currencies, from $20 billion on Sept. 30 and $12 billion the previous December. Buffett has wagered against the U.S. dollar since 2002 amid concern about rising U.S. trade and budget deficits. Last year the trade deficit rose 24 percent to a record $617.7 billion, while the budget shortfall was a record $412.3 billion. President Bush last month projected the budget deficit will rise to $427 billion in fiscal 2005. "The evidence grows that our trade policies will put unremitting pressure on the dollar for many years to come," Buffett said. "As W.C. Fields once said when asked for a handout: 'Sorry, son, all my money's tied up in currency."' As of Dec. 31, the greenback bought 8.3 percent fewer euros and 6.9 percent fewer Japanese yen than it did on Sept. 30. Buffett said promptly fixing the trade deficit would likely cause currency losses for Berkshire. But he said this might be offset by the benefits of a strong dollar and low inflation to the company's big stake in dollar-based assets. "I STRUCK OUT" Buffett also lamented Berkshire's inability to deploy its $43.4 billion of cash, which grew 21 percent last year. "Not a happy position," he called it. "My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings," he said. "But I struck out." He said he will seek acquisitions in 2005, including one of at least $5 billion. Berkshire also said the liquidator of two failed Australian insurers plans to assert claims against two subsidiaries whose deception it said helped cause the insolvencies. U.S. regulators are already examining whether some General Re policies improperly helped companies smooth earnings. For the year, profit fell to $7.31 billion, or $4,753 per share, from $8.15 billion, or $5,309 per share. Revenue increased 16 percent to $74.4 billion. Berkshire Class A shares closed on Friday at $89,300, and its Class B shares closed at $2,979, both on the New York Stock Exchange.